Online advertisement as Digital Promotions for Television

Online advertisement can also be classified as Digital Promotions. Digital promotion in connection to the television industry is when networks use authentic digital resources to promote their new shows in a growing vast range of venues.^[15] Television networks development of digital off air promotional strategies allowed digital promotion to remain significant to the advertisement advancement in the television.
Examples of television online digital promotions: The Sci Fi network for loaded a special recap episode of Battlestar Galactica onto Microsoft’s Xbox online gaming service; this gave the audience additional opportunities to sample content if they may or may not be familiar with the show.^[16] Another example of digital promotion in television is when network CBS incorporated new digital technologies of Bluetooth-enabled mobile devices that were able to download a thirty-second clip of a new show on their devices; consumers standing in range of a billboard don’t need an internet link to download the show’s content.^[17] These non-linear viewing opportunities provided as a valuable tool for gaining audiences; and to encourage them to intersect with the linear audience.^[18]
Internet users can benefit from online advertisement, such as getting the online contents they need for free that otherwise would have to pay for a fee from the funds of the advertisers. However, the catch is that they have to share personal information to the data collectors, which raises a controversy over this topic. ^[19]

Revenue models

Main article: Compensation methods

The three most common ways in which online advertising is purchased are CPM, CPC, and CPA.

• CPM (Cost Per Mille) or CPT (Cost Per Thousand Impressions) is when advertisers pay for exposure of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an advertisement. However, some impressions may not be counted, such as a reload or internal user action.

• CPV (Cost Per Visitor) is when advertisers pay for the delivery of a Targeted Visitor to the advertisers website.

• CPV (Cost Per View) is when advertisers pay for each unique user view of an advertisement or website (usually used with pop-ups, pop-unders and interstitial ads).

• CPC (Cost Per Click) or PPC (Pay per click) is when advertisers pay each time a user clicks on their listing and is redirected to their website. They do not actually pay for the listing, but only when the listing is clicked on. This system allows advertising specialists to refine searches and gain information about their market. Under the Pay per click pricing system, advertisers pay for the right to be listed under a series of target rich words that direct relevant traffic to their website, and pay only when someone clicks on their listing which links directly to their website. CPC differs from CPV in that each click is paid for regardless of whether the user makes it to the target site.

• CPA (Cost Per Action or Cost Per Acquisition) or PPF (Pay Per Performance)^[14] advertising is performance based and is common in the affiliate marketing sector of the business. In this payment scheme, the publisher takes all the risk of running the ad, and the advertiser pays only for the number of users who complete a transaction, such as a purchase or sign-up. This model ignores any inefficiency in the seller's web site conversion funnel. The following are common variants of CPA:
  • CPL (Cost Per Lead) advertising is identical to CPA advertising and is based on the user completing a form, registering for a newsletter or some other action that the merchant feels will lead to a sale.
  • CPS (Cost Per Sale), PPS (Pay Per Sale), or CPO (Cost Per Order) advertising is based on each time a sale is made.

• eCPM: Effective CPM or eCPM calculated through other conversion events such as Cost per Clicks, Cost per Downloads, Cost per Leads etc. for example when an advertiser getting $2 per download and for 100,000 impressions you received 10 downloads worth $20, in this case your effective CPM or eCPM will be 2*20*1000/100,000= $0.4

• Fixed Cost: Advertiser paying fixed cost for delivery frame by campaign flight dates without any relevance to performance

• Cost per conversion Describes the cost of acquiring a customer, typically calculated by dividing the total cost of an ad campaign by the number of conversions. The definition of "Conversion" varies depending on the situation: it is sometimes considered to be a lead, a sale, or a purchase.

Business models

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Internet marketing is associated with several business models:

• E-commerce: a model whereby goods and services are sold directly to a consumer or business.
• Lead-based websites: a strategy whereby an organization generates value by acquiring sales leads from its website.^{[citation needed]} Similar to walk-in customers in retail world. These prospects are often referred to as organic leads.
• Affiliate marketing: a process wherein a product or service developed by one entity is sold by other active sellers for a share of profits.^{[citation needed]} The entity that owns the product may provide some marketing material (e.g., sales letters, affiliate links, tracking facilities, etc.); however, the vast majority of affiliate marketing relationships come from e-commerce businesses that offer affiliate programs.^{[citation needed]}

Types of Internet marketing

Internet marketing is broadly divided in to the following types:

• Display advertising: the use of web banners or banner ads placed on a third-party website or blog to drive traffic to a company's own website and increase product awareness.
• Search engine marketing (SEM): a form of marketing that seeks to promote websites by increasing their visibility in search engine result pages (SERPs) through the use of either paid placement, contextual advertising, and paid inclusion, or through the use of free search engine optimization techniques also known as organic result.
• Search engine optimization (SEO): the process of improving the visibility of a website or a web page in search engines via the "natural" or un-paid ("organic" or "algorithmic") search results.
• Social media marketing: the process of gaining traffic or attention through social media websites such as Facebook, Twitter and LinkedIn.
• Email marketing: directly marketing a commercial message to a group of people using electronic mail.
• Referral marketing: a method of promoting products or services to new customers through referrals, usually word of mouth.
• Affiliate marketing: a marketing practice in which a business rewards one or more affiliates for each visitor or customer brought about by the affiliate's own marketing efforts.
• Content marketing: the process of creating specialized content such as infographics, blog articles and ebooks to attract more customers.
• Inbound marketing: involves creating and freely sharing informative content as a means of converting prospects into customers and customers into repeat buyers.
• Video marketing: This type of marketing specializes in creating videos that engage the viewer into a buying state by presenting information in video form and guiding them to a product or service^{[citation needed]} Online video is increasingly becoming more popular among internet users and companies are seeing it as a viable method of attracting customers.^[13]

Online advertisement

The internet has become an ongoing emerging source that tends to expand more and more. The growth of this particular medium attracts the attention of advertisers as a more productive source to bring in consumers.
A clear advantage consumers have with online advertisement is the control they have over the product, choosing whether to check it out or not.^[11]
Online advertisements may also offer various forms of animation. In its most common use, the term "online advertising" comprises all sorts of banner, e-mail, in-game, and keyword advertising, including on platforms such as Facebook, Twitter, and MySpace. Web-related advertising has a variety of ways to publicize and reach a niche audience to focus its attention to a specific group. Research has proven that online advertising has given results and is a growing business revenue.^[12] For the year 2012, Jupiter Research predicted $34.5 billion in US online advertising spending.

Competitive advantage over traditional advertising

One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto adopted an interruptive strategy.
Another benefit is the efficiency of the advertiser's investment. Online advertising allows for the customization of advertisements, including content and posted websites. For example, AdWords, Yahoo! Search Marketing and Google AdSense enable ads to be shown on relevant web pages or alongside search results.

History of online advertising

Online advertising began in 1994 when HotWired sold the first banner ads to several advertisers.^[1] Revenue in the United States grew to an estimated $7.1 billion in 2001 or about 3.1 percent of overall advertising spending. The dot-com bust destroyed or weakened many of the early online advertising industry players and reduced the demand for online advertising and related services.
The industry regained momentum by 2004 as the business model for “Web 2.0” came together.^[2] A number of businesses emerged that facilitated the buying and selling of advertising space on web pages. Entities that operated web portals settled on the traditional “free-tv” model: generate traffic by giving away the content and sell that traffic to advertisers. Most web sites, with the exception of transaction ones such as eBay, generate the preponderance of their revenues from the sale of advertising inventory—the eyeballs that view space allocated for promotions—to advertisers. In the first half of 2007 alone, advertisers in the US spent more than $10 billion advertising on websites.^[3] That was about 14 percent of all advertising spending.
The portion of advertising that is done online will increase significantly over time as more devices such as mobile telephones and televisions are connected to the Internet and people spend more time on these devices. The valuations that the capital markets are placing on businesses related to online advertising are consistent with this prediction. Google has had a seven-fold increase in its market value from August 2004 when it was valued at $29 billion to $215 billion in December 2007. During 2007 several companies in the online advertising market were purchased at multiples of 10-15 times annual revenues.^[4][5][6]
The online advertising industry burst into the public eye in 2007. Google’s sky-rocketing stock price and its forays into industries such as word processing software, online payments, and mobile telephones drew significant attention. More than 500 articles on Google appeared in the New York Times, Wall St. Journal and the Financial Times during the year. The U.S. Federal Trade Commission and the European Commission launched in-depth antitrust investigations into Google’s acquisition of DoubleClick, which provides software technology and services to online advertisers and publishers.^[7] Privacy concerns also came to the fore in 2007 as consumers, government agencies and the media started focusing on the massive amount of personal data that online advertising companies were storing and using.^[8][9]
Businesses began to move their advertising efforts into areas by making wide use of social media from 2009. The social media includes social networking tools such as Facebook, Twitter, Hi-5, social news tools such as Reddit, Digg Propeller, social photo & video sharing tools such as Photobucket, Flickr, YouTube and social bookmarking tools such as Del.icio.us, Simpy. One of the advantages of social media advertising is proper targeting of market through the use of the users’ demographic information provided. The disadvantage is measuring effectivity of social media advertising, whether or not the number of ‘likes’, ‘friends’ or ‘follows’ could convert to actual sales.^[10]