Advertising on the Web

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Advertising on the Web

• An overview

By Michael Lewis
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What am I talking about?

• The various types of Web Advertisements
• current spending in the market today
• what the future holds

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Beginning with an example
Bill Gross, a Pasadena, Cali., businessman, has
a great moneymaking idea. His firm, Free-PC.com,
will ship you a free 333-megahertz Compaq
computer. He'll also give you free Internet
access and a free maintenance contract.
What does he want in return?
Just your eyeballs and a bit of demographic
information.
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What!?..Why?
Gross' company will place ads on a small portion
of the screen as you use your free computer. And
with the information you give him about your
income, tastes, and so on, he will be able to
sell you to advertisers whose products and
pitches are aimed at your sort of person.
The more an advertiser knows about you, the more
it is willing to pay to reach you.
Of course, Gross is not the only one with this
idea.
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FREE STUFF!
The Web is full of sites that give away valuable
stuff free in the hope of making it back in
advertising.
Television programming is still mostly free to
the user.
And even newspapers and traditional magazines
don't begin to cover their costs from what
readers pay. Those readers are heavily subsidized
by advertisers hoping to sell them stuff.
What's notable about the Web is the profusion of
free offerings that go way beyond mere editorial
content filling in the space between ads.
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A Few Examples
There's an online store called Onsale atCost
selling computer equipment at the true wholesale
price. Onsale atCost may be the only store in the
world to hire PricewaterhouseCoopers to document
that it is not going to make a profit.
Free email is everywhere
Free faxing is easy to get at eFax.
In fact, there are so many free items one can get
on the Web Yahoo has made a site where you can
search for the newest freebie.
(http//dir.yahoo.com/Business_and_Economy/Free_St
uff/ )
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What kind of Ads are we talking about?
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Banner Ads
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What are the different modes of display?
A. Banner Exchange Services a great source of
free advertising. Basically you agree to display
a banner on your site, and in return, the banner
service displays YOUR banner on other sites. How
often your banner gets displayed is based on how
many times your site displays OTHER banners.
Thus, the more traffic that comes to your page,
the more times your banner will be displayed on
other sites.
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What are the different modes of display?
A. Banner Exchange Services SIDE NOTE Most
banner services also include other free services,
most notably statistics tracking. This is the
best way to keep track of how much traffic your
website it getting. You don't have to waste page
space putting up one of those little page
counters, just login to the banner service and
view your statistics. Most popular Banner
Exchange is LinkExchange
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What are the different modes of display?
A. Banner Exchange Services
B. Web Ring A web ring is a group of web sites
that have a similar focus or attract people of
similar interests. Each of the web sites in the
web ring displays some links to other sites in
the ring. The idea is that people will visit one
site in the ring and then proceed up and down the
ring, visiting other sites in the ring as well
and increasing traffic for everyone involved.
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What are the different modes of display?
A. Banner Exchange Services
B. Web Ring
C. ClickTrade You can participate in ClickTrade
as an Advertiser, as an Affiliate, or both.
Advertisers pay money to other webmasters for
referring visitors to their website, Affiliates
direct surfers to other websites in exchange for
a small payment.
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Lets focus on ClickTrade
CPM A company pays per 1000 impression. The
going rate is around 36 per 1000, although its
highly fragmented with low traffic areas going
for 3 and some high traffic areas going for 150
Performance Based This is a cost per click deal.
The going rate ranges from 12-16 cents per
click. In truly specialized areas 2 a click,
costs are up 6 cents this yr..
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Whos paying for these banners?
Young Internet companies are shelling out big
bucks to establish name recognition.
Medium - large Internet companies are spending
heavily too.
But, Large Internet companies are shelling out
most of the
In a breakdown of the revenues, the report said
the top 10 Internet publishers accounted for 70
percent of the total, reflecting the ongoing
consolidation of Web companies. Consumer-related
advertising dominated the ad categories, followed
by computing and financial services.
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How much are they paying individually?
The Young HotJobs.com just raised 16 million
from a group of venture capital firms, and it's
going to spend 12 million of that on
advertising, starting with a 30-second commercial
on Thursday night's season finale of Frasier,
which costs about 400,000.
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How much are they paying individually?
The Young
The MediumLarge E-Trade, the online stock
trading company, had revenue of 126 million in
the first quarter, and spent 60 million on
marketing and sales, a high percentage of which
went to TV advertising.
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How much are they paying individually?
The Young
The MediumLarge
The Large Amazon.com reported 294 million in
first-quarter revenue. Of that, about 61million,
roughly 21, was spent on marketing and sales
efforts.
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How much are they paying?
The top 5 advertisement spenders of 1998 and how
much
1. AMAZON 133.0 2. E-TRADE
71.3 3. BARNSNOBLE 70.4 4.
CDNOW 44.6 5. AMERITRADE
HOLDING CORP 43.6 (in millions)
2.6 billion will be spent on Web advertising in
1999. according to eMarketer.
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Will this continue?
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I see the future.
No, I dont. But heres what some view as the
future of Web ads
Webmercials television commercial adapted to the
Web.
Also called Interstitials
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Webmercials
What do they do? Webmercials run 5 to 7 seconds
in length and can be run as interstitial or as a
gateway to a site, in which case they would take
up the entire screen before the Web page shows
up. They are certainly sexier than a banner
advertisement,
Why are they here? Banners arent getting the
clicks anymore
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Webmercials
When are they coming? The first Webmercials will
hit the Internet in the next two weeks, Kavanagh
said. They will begin as interstitial ads, but
may grow to be an introduction to a page.
Problems? Despite their high-tech appearance, few
Internet users should experience technical
problems with Webmercials. - theyre small (35 -
45 K) - have a stop button to be easily stopped
and removed.
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Innovation is happening
Regardless of whether Webmercials are a big
success, or a huge failure, I expect well see Ad
banners around for a long, long time, but there
will continue to be innovations in creating
effective new vehicles for online advertisers.
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Resources
Internet Advertising Bureau http//www.iab.net W
ired http//www.wired.com/news/news/business/stor
y/17520.html AdResource http//www.adresource.co
m/ http//www.adresource.com/html/new/content/budg
et.html USAToday http//www.usatoday.com/life/cyb
er/tech/ctf215.html Slate http//www.slate.com/He
yWait/99-04-16/HeyWait.asp http//www.one.ie/banne
r/budgeting.html