A Report on Online Advertising

Executive Summary

The advent of the Internet opened up the possibility of personalized messages being delivered to targeted individuals. Online advertising enabled marketers to target specific customer segments, gather information, assess sales potential, and ensure product/service exposure across geographic boundaries in a cost effective manner. The Internet has the capacity to reach a global audience faster than any other medium. The multiple forms of online advertising tools developed by advertisers over time were aimed at creating exciting, interactive, eye-catching advertisements that could draw consumers'attention while at the same time increasing their brand recall or online sales.

Some of different types of online advertising include display advertising or banner ads, sponsorship, e-mail advertising/opt-in e-mail advertising, search, lead generation/referrals, classifieds and auctions, rich media, skyscraper ads, pop-up / pop-under ads (interstitials), floating ads, and search engine advertising. Video advertising is also emerging as a new trend in online advertising. There are also a number of tracking programs that help advertisers and businesses in gauging the effectiveness of online advertising.

The major players in online advertising include Google Inc, Yahoo! Inc, MSN, and AOL. Considering the effectiveness of online advertising, many companies across the world have begun to divert a share of their advertising budget to online advertising. As a result, the share of television in advertising expenditure has been projected by some experts to decrease by the year 2007.

Some of the various factors that have led to the growth of the online advertising market are the increase in number of Internet users'worldwide, increase in the length of time spent by Internet users online, and more widespread broadband Internet usage.

However, some of the challenges that could impact the growth of online advertising are the issue of click frauds that occur with pay per click search engine based advertising, and certain intrusive software such as popups and adware. These problems can affect the credibility of the advertiser and the website. An economic slowdown can also negatively impact the growth of online advertising as companies resort to cutting their advertising expenses during an economic crisis.

Keywords

Online Advertising, pop-up / pop-under ads, search engine advertising, Marketing Communications , Advertising Effectiveness , Google AdWords, Google AdSense, Pay per click advertising, Google Inc, Yahoo! Inc., MSN Microsoft, AOL, Click Fraud, Adware, Search Engine Optimization, Mobile Advertising

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