The internet is increasingly becoming an attractive channel for advertising. Further, the market for online ads in the US is expected to grow to $26 billion by 2010. The beneficiaries of this growth in online advertising revenue are web publishers or portals on the one hand, and search engines on the other. While internet users visit web publishers for their information content, they visit websites of search engines to search for the internet addresses of publishers or for the addresses of online sellers of specific products.
Traditionally, publishers have sold display advertisements (hereafter, simply ads) such as banner ads to advertisers interested in reaching visitors to their websites. In this case, advertisers primarily relied on the number of impressions or 'eyeballs' delivered by the publishers and the asking price for the ad space, in choosing where to advertise.
More recently, search engines such as Google have given a new impetus to online advertising by selling search-related ads that are placed alongside search results delivered to users. Advertisers in this case have much more than an average demographic characteristic of the search engine user to go by in gauging the usefulness of advertising.
Search engines such as Google have given a new impetus to online advertising by selling search-related ads.The search keyword such as 'wall clock' that is entered by the search engine user reveals a specific interest in the product or even the brand, and this makes the user a valuable prospect to sellers of the product. This advertising innovation has made search-related advertising the fastest growing component of online advertising.
The success of search-related advertising has enabled Google to extend this idea to placing context-related ads at the website of publishers.
Just as online advertising has evolved from banner ads to search- or context-related ads, pricing of online ads to advertisers has evolved over time. In the early days of the World Wide Web, the pricing model for online ads imitated that used for traditional offline media such as print and TV, with the publisher charging a flat fee for displaying a fixed number of impressions of an ad. Since this flat fee was usually computed based on thousand impressions, this pricing model came to be known as CPM (cost-per-thousand).
Subsequently, CDNow.com introduced the idea of paying web publishers based on click-through generated from ads or links placed on the publishers’ website. Since the advertiser is charged only when a consumer clicks on the displayed ad, this pricing model came to be known as cost-per-click (CPC).
In basing payment on clicks, the CPC pricing model capitalised on the ease of measuring consumer response in the internet medium.Many advertisers preferred CPC over CPM because the former is more closely linked to an ad’s performance. In 2003, another innovation was introduced by GoTo.com when it auctioned the ad space to the highest bidding advertiser. This auction model is now commonplace in the search related advertising category, where specific search keywords such as 'wall clock' are auctioned, and advertisers use automated bidding software to submit bids per click for millions of search keywords.
A pricing model that is even more closely tied to performance is one where the publisher is paid only when the click results in a purchase.
Google recently made an interesting announcement -- that it would also accept bids per impressions for its context-related ad services. In sum, pricing models for online advertisements differ on whether payment is based on impressions or clicks, and on whether the price per click or impression is posted or decided through an auction.
In this context, a pricing model that is even more closely tied to performance is one where the publisher is paid only when the click results in a purchase. This model is also used in internet advertising. A distinguishing feature of our analysis is that it considers the effect of product-market positioning of online advertisers on their bids for online ads and the consequent implications for pricing policies.
Thus it considers the following research questions:
1.What are the implications of pricing based on impressions versus clicks?
2. How is pricing for search- or context-related advertising different from other less precisely targeted advertising methods?
3.What are the implications for volume discounts given for higher click through rates (CTR) of an ad?
4.What are the implications of alternate policies for choosing the winning bidder for advertisements?
With respect to the last question, two policies for choosing the winning bidder are observed in the online advertising industry. In one policy the advertiser who bids the highest CPC is considered the winning bidder. On the other hand the second one derives a rank score by multiplying the maximum CPC bid by an advertiser for a search keyword with a quality score that increases with the advertiser’s CTR, and the winning advertiser is the one with the highest rank score.Offline ads can increase advertisers’ profit from online advertising suggesting that a synergy exists between these forms of advertising.
Finally, the impact of offline ads by the advertiser on the profitability of online advertising to the advertiser and publisher is considered. This is an important issue facing marketing managers as they decide how to coordinate offline and online advertising in their marketing mix.
Here, we assume that the products of these advertisers are positioned to appeal more to one of two different consumer segments. Our main conclusions are as follows:
* Bidding based on impressions or clicks yield surprisingly equivalent results in terms of advertiser and publisher profits. On the other hand, advertising placed with knowledge of a search keyword or context can be more profitable for the advertiser.
* It can also be found that, the volume discounts based on number of clicks or impressions can increase the publisher’s profit while also maximizing the profit of the channel consisting of the publisher and advertiser.
* Lastly, offline ads can increase advertisers’ profit from online advertising suggesting that a synergy exists between these forms of advertising.
Article by: Subramanian Balachander & Karthik Kannan, Assistant Professors of Management, Krannert School of Management, Purdue University, USA
Showing posts with label Search Engine. Show all posts
Showing posts with label Search Engine. Show all posts
Wednesday, February 13, 2008
Sunday, January 13, 2008
3 Websites That Will Drive More Traffic To Your Internet Business Blog
There are as many ways as there are ideas to get visitors to come to your blog. In this article we'll focus on social bookmarking and news websites. Let's look at 3 and see how they work.
OnlyWire.com
By definition OnlyWire is a social bookmarking service that allows you to submit your articles or blog posts to many social bookmarking websites at once. Social bookmarking allows internet users to classify pages they would like to bookmark with tags instead of keeping them in a bookmark folder on their computer. These bookmarks can then be shared by all online users of the social bookmarking website. The theory behind social bookmarking websites is that if you find something interesting or useful on the web then the odds are high that someone else using the bookmarking website will find it interesting as well.
Social bookmarking websites are very popular with the major search engines, so if your blog posts can be found on these social bookmarking sites they will be noticed by the search engines as well. Additionally, as people bookmark resources that they find useful, resources that are of more use are bookmarked by more users. Thus, such a system will "rank" a resource based on its perceived utility. This is arguably a more useful way to get information than other systems which rank resources based on the number of external links pointing to it.
When you create an account with OnlyWire you'll be initially asked to sign up for all of the bookmarking sites that OnlyWire will submit your blog posts to. This initial effort will allow OnlyWire to bookmark you blogs on 10 or more social bookmarking sites all from a button installed on your browser's tool bar. Once you set up your account and are ready to submit a post you'll simply need to enter the title of the post, a short description, the main keywords that describe your post(tags), and the category that it fits. Over time you will find more and more of your posts ranking in the search engines.
Stumbleupon.com
StumbleUpon works on the same premise as OnlyWire and is also assigned a button on your browsers tool bar for when you are ready to submit your content. The difference with OnlyWire is that there is also a community component so you can add friends to your account and let them see what you've been bookmarking and vice versa. You can form networks of people with similar bookmarking interest, and vote on sites that have been bookmarked.
Digg.com
Submitting your blog posts to Digg.com is a great and fast way for quality traffic. Digg was create for people to share content from anywhere on the web. You can create an account to submit your posts which are then read and rated by it's users. By submitting informative and helpful items you can create popularity and be promoted to the front page. This can create a stream of traffic that lasts a long time and potentially cause your blog to be seen my millions of users. Another advantage of Digg is that all information is equal when it is submitted and only becomes ranked higher by the people who vote for it. If you have a way of tracking the traffic to your blog you will notice visitors from Digg after every submission from people across the globe.
As you can see, there are many ways to get free traffic to your internet business blog. These methods don't take much time at all and can have a long lasting effect on your blog traffic. Social bookmarking websites are also significant to the search engines which is where most websites and blog traffic comes from. Becoming consistent at using these sites every time you make a new post is the technique will work to get some good traffic to your internet business blog.
OnlyWire.com
By definition OnlyWire is a social bookmarking service that allows you to submit your articles or blog posts to many social bookmarking websites at once. Social bookmarking allows internet users to classify pages they would like to bookmark with tags instead of keeping them in a bookmark folder on their computer. These bookmarks can then be shared by all online users of the social bookmarking website. The theory behind social bookmarking websites is that if you find something interesting or useful on the web then the odds are high that someone else using the bookmarking website will find it interesting as well.
Social bookmarking websites are very popular with the major search engines, so if your blog posts can be found on these social bookmarking sites they will be noticed by the search engines as well. Additionally, as people bookmark resources that they find useful, resources that are of more use are bookmarked by more users. Thus, such a system will "rank" a resource based on its perceived utility. This is arguably a more useful way to get information than other systems which rank resources based on the number of external links pointing to it.
When you create an account with OnlyWire you'll be initially asked to sign up for all of the bookmarking sites that OnlyWire will submit your blog posts to. This initial effort will allow OnlyWire to bookmark you blogs on 10 or more social bookmarking sites all from a button installed on your browser's tool bar. Once you set up your account and are ready to submit a post you'll simply need to enter the title of the post, a short description, the main keywords that describe your post(tags), and the category that it fits. Over time you will find more and more of your posts ranking in the search engines.
Stumbleupon.com
StumbleUpon works on the same premise as OnlyWire and is also assigned a button on your browsers tool bar for when you are ready to submit your content. The difference with OnlyWire is that there is also a community component so you can add friends to your account and let them see what you've been bookmarking and vice versa. You can form networks of people with similar bookmarking interest, and vote on sites that have been bookmarked.
Digg.com
Submitting your blog posts to Digg.com is a great and fast way for quality traffic. Digg was create for people to share content from anywhere on the web. You can create an account to submit your posts which are then read and rated by it's users. By submitting informative and helpful items you can create popularity and be promoted to the front page. This can create a stream of traffic that lasts a long time and potentially cause your blog to be seen my millions of users. Another advantage of Digg is that all information is equal when it is submitted and only becomes ranked higher by the people who vote for it. If you have a way of tracking the traffic to your blog you will notice visitors from Digg after every submission from people across the globe.
As you can see, there are many ways to get free traffic to your internet business blog. These methods don't take much time at all and can have a long lasting effect on your blog traffic. Social bookmarking websites are also significant to the search engines which is where most websites and blog traffic comes from. Becoming consistent at using these sites every time you make a new post is the technique will work to get some good traffic to your internet business blog.
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