Online advertising revenue increased for the third year in a row according to recent report released by Merrill Lynch. With most companies planning to spend between 10% and 20% of their advertising budget online, the overall growth of online advertising is expected to surpass 25% by 2010.
Last night I saw an online ad when I was checking my hotmail. The ad was a game claiming that I could win a cell phone by lighting farts on fire. I must admit that I thought it was a little bit weird, but I felt compelled to try it out. Using the videogame concept as a form of advertising is just one thing that separates online advertising from traditional methods.
Keyword advertising, those hyperlinks that now appear on some site’s text, currently has the largest market. The advertisers use algorithms to target specific websites at users based on the context of the content the users are viewing.
Another form of advertising is the pop up Flash movie. These are similar to TV ads without sound. One popped up when I clicked the link to a security article in my RSS Reader. I had no choice but to notice it.
Some RSS feeds even have advertisements in the feed body. Such inline RSS ads have a teaser for a product or service packaged with a link for more information. I clicked on one of these links and reviewed a security scanner as a result of the ad.
As e-commerce becomes more secure and users become more comfortable making online purchases, interactive online advertising will play a key role for the following reasons:
-
Interactive ads can be fun.
-
Online ads can be targeted users that are actually interested
-
Hyperlinks conveniently drive customers to the point of sale
As bandwidth and Internet access increases, televisions will become smarter. Advertiser demand will drive and help pay for the shift from the current static, hierarchical, television format into a more dynamic format that allows for these same opportunities. Television ads, which are being TiVo'ed out are a point of concern for most advertisers. The major concern now is how the money will be spent. Will the same conglomerate of media companies continue to receive virtually all of the advertising revenue? Or will we be able to diversify this spending in a more fair and balanced manner? The interactive potential for online ads should go along way to help advertisers rest peacefully.
Related Articles:
Carl Howe
ClickZ News