Learn the different ways online ads work

Types of Online Advertising

Online advertising has changed from the development of graphical ad units and animated graphics to more targeted online ads that can include interactivity and video. Ads are usually sold in one of three ways. Impression based, Audience Based and

Revenue Models

Advertisers generally have a variety of ways to approach advertising online:

CPM (cost per thousand)
An ad is sold based on how many times it is showed, regardless of wether the same person sees the ad more than one time).

CPV (Cost per visitor)
The advetiser pays for how many individuals see the advertisement. CPC (Cost per Click), the advertiser pays for each click to their website.

CPA (Cost per Action)
Where the advertisers pays for a user performing a specific task.

Delivery Methods

The delivery methods means how the ads are to be presented to the viewer. There are many varied types.

Affiliate Marketing
Instead of putting all of your eggs in one basket, affiliate marketing is a way of advertising through a network of small blogs or large websites. This type of advertising involves contracting with an affiliate network who is an aggregator that can serve your ads to a large range of companies. The advantages are that the network can be varied and extremelly targetted to a range of small blogs and companies.

Contextual Advertising
Ads are placed within pages of content where the type of ad served varies with the type of content on the page. This is another way of targeting individuals with specific hobbies/needs by showing your ad on pages that have content relevant to them.

Behavioral Targeting
Ads can be served based on how the user acts within a network like facebook or other sites that keep track of a user's behavior.

Email Marketing
Ads can be served as part of a newsletter delivered to a network of users on on a timely basis.

Feed Advertising
Ads can also be attached to different feeds of information like RSS feeds or Twitter feeds. They can be served contextually or extremely targeted.

Mobile Advertising
Mobile ads can also be served as texting campaigns to users of cellular phones.

Types of Ads

Traditional Ad Units
These are ad units like online banners, tiles, leaderboards, microbars as specified by the Internet Advertising Bureau. They are animated GIF, static JPEG, or intreractive SWF graphics served on a page as part of the content within the page usually in a graphic manner.

Video Ads
Short video commercials like what's on TV, but generally shortened to about 15 seconds and whose audio is usually turned off. Video ads can also play at the beginning of video content (pre-roll) and at the end of video content (post-roll). Ads can also appear as banners or graphics on top of video being played

Expanding Ads
Ads that expand when rolled over with the mouse to fit more content within the ad unit.

Pop-up/Pop-under
Ads which appear in a new window when a someone visits a site either on top of the current page or in a window that is below the current page.

Floating Ad
An ad that appears above the content on a page visited by a user.

Pre-Roll
An ad that appears on a page before the user gets to content

Traditional Advertising Methods

The traditional method of selling online ads has been an impression/audience based model which is similar to how traditional advertisements are sold. If you homepage gets 30,000 pageviews and there's a single ad on the page, then you have 30,000 impressions of an ad at a specific size to sell.

The advertiser in this case will be curious as to the size of your audience (absolute unique visitors) and how many impressions you can deliver per time period the ad will run. When an advertisers sells a lot of advertising on a site. The different positions of the ads as well as how often the ads appear on a page are important.

An ad position can rotate with many other ads and different users visit the pages. Ads can also run within specific channels or sections of the websites. The ad can also run as a run of site or throughout all channels of the entire website.

Online advertisements usually have a low click-through rate (the percentage of people who saw the ads and clicked on them to get more info.)

Google AdWords

Google pionneered a way of serving simple text only advertisements tied to search results that have made it an online powerhouse. Advertisers can buy keywords so that when someone is searching for a website, the keywords they type in bring in different types of ads in the search ads section of their site. Say, for example that you're searching on Google for Orlando Photographers. Only ads for Orlando photographers will appear on the search page results that google returns. Advertisers bid for how high in the results their ad appears. Advertisers pay only for the amount of times that the ads are clicked on...not for how many times the ad is displayed.

The bidding system rewards not only ads with the most money bid, but also the ads with the best click-through by placing ads with higher click-throughs at the top of the page.

This works extremel well because of relevance. Google does an excellent job of not only indexing the web, but also knowing information about how users find things.

Google AdSense

Google Adsense is an Affiliate network where Google places ads inside your blog or website. The ads are very targeted and Google pays you a small amount every time someone clicks on the ads. This is an easy way to get started with online advertising, but you won't get rich with it unless you have a lot of traffic to your sites.

Facebook & Targeted Ad Networks

Facebook and other networks work in a more targeted manner that is the future of how advertising is sold. Facebook knows a lot about it's users because of their habits, profiles and usage of the site. When you purchase an ad on Facebok you can specify a geographic locaiton, look for people based on their age, sex, martital status, what kind of music they like, hobbies, etc.

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