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June 24, 2014

Internet Advertising: A Study

Advertising is the impersonal presentation of a sales-creating message to large group of people. The primary goal of advertising is to draw attention of the people towards the existence of some specific product.
Frequency of advertising is an important question for any product. It is much better that institutional advertising should be done regularly. Attempts to stimulate interest in the product should be part of a continuous advertising program. One-shot advertisements, which are not part of a well-planned advertising effort, lose much of their effectiveness in a short time.
It is necessary that the advertising media should reach but not overreach the present or desired market. Following are some of the advertising principles upon which the successful advertiser regularly depends:
·         Advertising should be truthful, honest, and in good taste
·         Advertising must be regularly and consistently used for maximum impact
·         The advertising message should reach the right people- the potential customer clientele
·         The product should have factual knowledge of its market so that the advertising will be properly designed with appropriate appeals
·         Each type of advertising should fit into a total advertising program designed for maximum sales impact
One often hears the statement that it pays to advertise. A little reflection upon these principles of successful advertising reveals this to be only a partial truth. Only effective advertising actually pays.
            Internet has been emerged and used for advertising purpose since 1994. With the advent of Internet, the world has become a global village now. It is necessary for anyone and everyone to think global in doing business in this global village. Diversity and globalization in the new economy and the present business situation has produced a work force made up of people all around the world. They have different life experiences, perspectives, preferences, values and style. This diversity of work force is reshaping and rewriting the way of doing business.
There are many benefits for using Internet for advertising. Some of the important reasons for using Internet for advertising are as follows:
·         Internet advertising helps the company to recognize the needs of the consumer and how these needs can be fulfilled more effectively
  • Online Advertising helps the customer to get the competitive prices for everything
·         With the help of online advertising, a company is able to reach to its customers twenty four hours a day and seven days a week
·         With the help of online advertising, a company is able to reach such markets and customer, which it has never thought of reaching before
·         With the help of the Internet Marketing a company can easily receive feedback from its customers without any extra cost
·         As Internet advertising is available 7 days a week and 24 hours a day, it helps to provides the opportunity to the business owner to get their customers updated about any new development
·         Internet is an interactive media, which uses two-way communication. It helps the business owner to answer the questions of their customers and potential customers
·         Internet can reduce risks by first investigating the market reaction for the product. This can be done by test marketing. The important thing is to discover the probable reaction of customers about a product as early as possible
·         Internet advertising provides the opportunity to the business owner to reach targeted customers
Techniques of Internet Marketing:
The concept of customer satisfaction has become increasingly critical in the present business world. At one time the accepted philosophy was expressed as “let the buyer beware”. In contrast, today’s newer philosophy holds, “let the seller beware”. Today’s sophisticated buyers feel they should be able to purchase products that are safe, reliable, durable, and honestly advertised. Achieving customer acceptance is of obvious importance if the business hopes to earn profits. Because customer contacts constitute an integral part of business operations, they are often viewed as something other than public relations. Charlie Buchwalter, vice President for Media research for AdRelevance said about the trends of Internet advertising,
Online advertising is no longer just about click-through. Although industry and financial analysts have relied on click-through rates to gauge the effectiveness of online ad campaigns, the market has finally realized that click-through is not an appropriate metric for brand-oriented ads. Leading advertisers have already drifted away from the click-through mentality of pure direct response marketing, as AdRelevance data show that a full 63 percent of the ads are brand-oriented. As streaming and rich media comer more into play, the Internet will increasingly function more like a traditional branding medium -- making advertising on the Web more appealing to all, especially traditional companies who have mastered offline brand management strategies” (Pastore, 2000).
In order to get the desired customers, companies use the following techniques for advertising on Internet:
·         Banner Advertisement
·         Pay Per click programs
·         Email Marketing etc.
Banner Advertisement:
Banner advertising is the most popular form of advertising on Internet. A banner is usually a graphical link displayed on high traffic websites. Banners are used for advertisement of any specific product, or any other website etc.
There are two types of banners used for advertising, i.e. Static and dynamic. Static banners are not commonly used. They are such banners, which do not change for any user or for any page loads. On the other hand, dynamic banners can change for each page loads. Dynamic banners are more effective and that is why more commonly used for advertising. They need specific programming, either CGI scripting or ASP or Cold Fusion coding to run. 
 Although banner advertising is very popular form of Internet advertising but it is not as effective as it is popular. It has been noticed that banner advertising only creates medium effects in generating traffic. According to Jupiter Communications, almost 80% of banner inventory will not sell. David Wamsley, Chief Executive of said that 50 to 70% of banners on high traffic websites failed to generate traffic (Forrester Research).
Pay Per Click Programs: 
Pay per click programs are usually used by paid search engine results. There are several pay per click programs available on Internet like Google, Overture, Looksmart etc. let us discuss the effectiveness of some of such pay per click programs.
Overture is one of the very first to start pay per click programs. It started their pay per click program services as, but after few years they re-launched the program as Overture. With the change of name they have also changed the style of their services. As they provided searching facilities to the visitors who came to their site while as Overture they are providing their services to search portals.
Overture is doing very well with their pay per click program. They have recently bought AltaVista and Lycos and have distribution deals with Yahoo, MSN and Infospace.
Overture pay per click program works by allowing the websites to bid on keywords and whoever has the highest bid get the first position on listing, the second highest bid get the second position and so on.
This system creates a competition between bidding websites and so overture become more expansive than Google or Looksmart. Overture is also associated with Gator, which is a spyware company and most of the websites do not want to associate with such an infamous company.
Google named their pay per click program as Google Adwords. This program also works like overture’s PPC but as there is not so high competition, Google Adwords are less expansive than Adwords pay per click program. Google charge only $5 setup fee and the listings on Google become live immediately.
There are some disadvantages of using Google Adwords. First they offer very limited space to write ad. Google also monitor the performance of any ad and if the ads are not performing well, Google disable them. 
Email Marketing:
A hundred years ago, letter writing and reading were leisurely affairs. Today, many people receive over 50 e-mail messages daily, and have only a few minutes to deal with them. It is important, therefore, that for email advertising, messages should be effective and must be concise. Many companies use E-mail newsletters to advertise their business online. The type of service varies widely: as yet many sites are one-page advertisements for a newsletter that is e-mailed to the potential customers, some have sample newsletters to read, some may have the whole newsletter available on the web with password-protected access, while others still may offer a mixture of free and restricted access pages.
E-mail marketing is one of the most effective techniques for advertising online as it has a response rate from 3-15%.
An effective e-mail advertisement must possess the following qualities:
·         Straight to the point: it is recommended that an effective e-mail advertisement does not contain any formality. It must be straight to the point, with the reason for the message appearing in the first few lines 
·         Does not contain long paragraphs of text: text presentation on computer monitors is not one of the great achievements of the modern age- it is awkward and tiring to read. So it is better to break the messages into smaller units with each paragraph being just a few lines long
·         Don’t get clever with the layout: it is recommended that simple layout must be used for email marketing because the customer may use a different email software which alters the presentation of the message entirely
·         Effective Subject heading: the subject heading should be as precise and detailed as space allows. It is actually the subject which attracts the customers towards the message
            Almost all the organizations, can use Email marketing for the their businesses, like:
·         Consumer Businesses
·         Industrial Businesses
·         Service Firms
·         Universities and Private Education
·         Non-Profit organizations
·         Association and Trade Groups etc.
Whatever the format of the Email advertisement, and whatever the type of organization, Email advertisements is likely to be one of the greatest growth areas in the Internet advertising.
All the above-mentioned techniques are effective and companies use one, two or all the techniques to advertise their business. According to Charlene Li, Senior analyst in Media and Entertainment research at Forrester research, said that,
There is a sea change underway in spending for online marketing. Companies love the visibility that AOL and Yahoo! deliver, but they need a much higher customer acquisition rate than these broad-based portals can offer. To realize some return from their Internet ad spending, retailers are demanding pay-for-performance deals that only vertical portals and affiliates can deliver. This is where the ad dollars will go over the next five years" (Forrester Research).
Barriers for Using Internet for Advertising:
Although we are living in an information society but it is equally true that only a part of the world has access to all its facilities. For example Internet is the best source of sharing information but there were digital, cultural and content gap between different parts of the world. Hence to use Internet for either E-Commerce or for advertising, following barriers have to be overcome.
Digital Gap:
The digital gap is most evident at the phase of connectivity; the lack of affordable access to PCs, Internet devices, modems, telephone lines, and Internet Connections. Steps to reduce this gap include devising cheaper access devices, creating Internet community access centers and bringing down access prices by creating a favorable climate of competition among Internet Service Providers.
It has been estimated that there are more phones in the New York alone than the whole rural area of Africa and almost 80% of the world population has never made a phone call (World Bank 1998). It has also estimated that there are more Internet Connections in London alone than the whole Africa
The developed countries, whose population comprises only 15% of world population, has almost 88% of Internet users (United Nations, 1997)
It has also been estimated that only 1% of the Internet users live in Africa and, if we exclude South Africa then the number of Internet users is less than 100,000 in whole Africa, which is only .02% of the global Internet content (Africa)
Developing countries share of Internet users is less than 5% etc. The reason for such low usage of Information and Communication Technology in developing countries is the cost of Internet. In Africa, the average cost of using Internet for 5 hours only is approximately $50 per month. Most of the developing countries have not enough per capita income to cover the expenses of the usage of Information and Communication Technology and that is the main reason why the growth of Internet users is so slow in developing countries (World Bank, 1998).
                     There is no standardized infrastructure of ICT for the whole world. Some of the countries, especially the developing and the under developed countries do not have a proper infrastructure of computers and their communication through telecommunication. The digital gap is most evident at the phase of connectivity; the lack of affordable access to PCs, Internet devices, modems, telephone lines, and Internet Connections. Steps to reduce this gap include devising cheaper access devices, creating Internet community access centers and bringing down access prices by creating a favorable climate of competition among Internet Service Providers. Work has begun on initiatives to increase Internet diffusion via kiosks, community centers, cybercafes, and wireless delivery and non-PC devices but much innovation and investment are still called for. The cost of dial up and leased lines are dropping, but they could become even more affordable. Organizational adoption of Intranets and extranets is now emerging. Universal access issues and peering agreements will continue to dominate the Internet Service Provider scenario in many technological emerging countries of the world. Special concerns arise in cross-country wiring for regions with mountainous terrain, with large arid tracts or with a high density of island space. No peering agreement for forming national Internet-exchange –let alone regional ones exist in most of the emerging economies; most inter-ISP traffic is routed via the US, Europe, or East Asia
Content Gap:
The gap also extends to content in terms of number of web sites in developing countries, amount of local language content, and use of online content by key sectors.
There are at least seven measures of market maturity for online content in a country. These measures are:
1.      Total number of web sites about the country
2.      Local relevance and usefulness of the content
3.      Local language standardization and usage on the web
4.      Amount of substantial content
5.      Presence of metacontent such as directories and search engines
6.      Amount of ad revenues that target online audience via these sites
7.      Presence of third party services from online traffic auditors, ad revenue auditors, and market research groups
It is necessary for the developing countries to increase activity within each of these seven dimensions to help reduce the content gap. According to the International Telecommunication Union, there were more Internet hosts in Finland than in all of Latin America and the Caribbean in 1999, there were more hosts in New York than in all of Africa, and more than 80% of web pages were in English (InternetWeek, 1998).
Cultural Differences:
Culture represents probably the biggest challenge in closing the digital gap. It involves overcoming cultural inhibitions and insecurities about developing competence for surveying the breakneck speed of the Internet age. Closing the Internet gap includes getting governments in developing countries to stop treating their telecom monopolies like cash cow and instead, getting government telecom players to invest in areas like research and development on Internet telephony, so that the technology is seen as a market opportunity on a global scale and not a threat on a local scale. It also includes getting career-track diplomats, bureaucrats, academics and public sector employees to take up Internet training and harness the opportunities as well as the plentiful challenges that accompany Internet diffusion. Closing the cultural gap entails the creation of a risk taking culture, in which accepting some initial failures should not be treated as sign of weakness or a loss of face.
Security Threats:
Security is one of the most important concerns of using Internet for marketing or advertising. If an organization want to make its website secure, it has to provide the following securities:
·         Physical Security
·         Authentication and non repudiation
·         Software security (Kary, 2002).
The physical security is actually the safeguarding of organization’s computers from hackers and viruses. For viruses the company can use anti-virus software and for hackers Firewall will be the answer.
The authentication and non-repudiation are actually the security checks for the integrity and privacy of the user. To ensure the privacy and authenticity the technologies of encryption and digital signature are used.
A major threat to the security of the software is to make it difficult to access the desired software. Software, especially the operating systems are easy to delete. It is also possible to infect the software in such a manner that it becomes useless for the users, or to modify it so it behaves in a peculiar manner.
Password protection is also one of the major techniques to provide the defense against intruders. Passwords help to determine the authenticity of the user logging into the system.
As far as the business on Internet or Internet advertising is concerned, the whole thing is very simple; there are sellers wanting to sell, their goods or services. Now if only these sellers could meet their buyers’ chances are a lot of things would be bought and many transactions (or sales) would be completed. Very simply it gives buyers and sellers a place to trade on. Sellers post the description of what they want to sell, including pricing, specifications, shipping information, perhaps even a digital picture of the product. Buyers scroll (or search) through the myriad of postings, see what they like-and communicate with the buyers. Internet facilitates this “bringing-together” by employing very simple models, that are coupled with ancillary functions and value added services like credit check on the seller, fulfillment, detailed specifications on the transactions, shipping information directly from the source itself, add to this escrow, referral fees and even auctioning.
Internet advertising has many benefits; it provides the opportunity of being global to the organization. It also helps the organization to reach such markets, which it has never thought of reaching before. It helps the organization to run its business 24 hours a day and 7 days a week without any extra cost of employees etc. Different techniques are used to advertise on Internet and all are effective depending on the nature of business of the company. Thus it totally depends on the company whether it chooses one, two or more techniques to advertise on Internet.


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