live project on online advertising industry

8/14/2019 live project on online advertising industry

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INTRODUCTION

Advertising is aprocess, not a medium in its own right, although it uses differentmedia forms to communicate. Advertising, in its simplest form, is the way inwhich the vendor or manufacturer of a product communicates with consumers via

a medium, or many different media.

It can be as simple as a For Sale card placed on a supermarket notice board:

The vendor is giving notice that a product is for sale at a given price to peoplewho might be interested in buying it. This harks back to the earliest forms ofadvertising, when exotic new goods shipped into Europe from the Far East andIndia (e.g. tea and spices) needed to be brought to the attention of people whohad never encountered them before.

However, even a supermarket notice board might be considered a crowded

marketplace as there may be other desks offered for sale, and otheradvertisements for customers to read. In order to attract a customer's attention tothis particular advertisement, the person offering the desk for sale has to make iteye catching - perhaps through simple use of color:

They also have to emphasis the benefits of the product they are offering. Thereare only two basic benefits that a product has when compared to others of asimilar sort. It can be described as being better or cheaper (or both!!):


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They might also add an image of the desk - a picture is worth 1000 words afterall - in order to persuade the consumer still further that this desk is the right deskto buy. They might add a headline or slogan to their ad, to announce exactly whatit is that is being sold. Thus they have all the basic elements of print advertising:a catchy slogan, an image, and copy text. This advertisement will hopefully fulfillits purpose which is to provide information which might influence someone to buythe desk. It has done this by linking the vendor of the desk to people who arelooking to buy a desk. The link appears in the medium of the supermarket noticeboard, and the vendor pays the owner of the medium to place it there. Thevendor has chosen this medium because the kind of people who buy the kind ofdesk advertised read advertisements on supermarket notice boards.

Therefore advertising is

A message from vendor/manufacturer to consumer

Intended to give information which will influence consumer choice

Aimed at a known audience

Paid for

Types of Advertising

Advertising, as we have already discussed, is any paid for space whichcommunicates a message about a product/service and can be categorizedaccording to the medium in which it appears. Traditionally, this has been splitbetween

Television & Cinema

Radio

Press & Publication

Direct Marketing Packaging

Outdoor and Event

Television

The history of mass advertising and the history of television are closelyintertwined. Without advertising, television would have made no headway in


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countries without a state sponsored broadcaster (mainly the US) and wouldcertainly not be the instrument of mass communication it is today. Televisionadvertising takes the form of TV commercials (often referred to as TVCs or spots)which are either 30 or 45 seconds long.

TVCs appear in gaps between and during regular programmes, known ascommercial breaks. Advertisers buy time in specific breaks, knowing that theirtarget audience must be the same as that of the programme during which thebreak occurs. Thus teen soaps have commercial breaks filled with pimple creamand music CD ads.

Advertisers may choose to sponsor a whole programme, which means their logoand a short identity clip accompany the beginning and end of a programme("Brought to you by...") and their advertising may feature heavily in commercialbreaks during that programme. This is controversial, as it is felt that sponsorsmay interfere in the content of the programme if it doesn't work in their favor.

Television advertising is under threat from devices such as the TiVo - hard driveswhich record programmes but edit out ad breaks. The problem is, without thefunding that selling commercial space provides, there would be no TVprogrammes to start with, so TV companies are very anxious about the long termconsequences of the TiVo. Read more about the debate here.

Most big manufacturers now include their latest TV ads as part of the material ontheir website - try these from Apple but you can look for your own favorites. Youcan find ads from our very own ICAC here.

Cinema

Cinemas provide advertisers with a very specific audience (often sorted by ageand taste and often difficult to reach groups, such as 15-18 year olds) who areconcentrating on a big screen in an environment without distractions. Becauseaudiences are age rated, cinema commercials can be more daring andinnovative than those that appear on TV which are aimed at a general audience.Cinema campaigns can be national, or extremely local (running in just oneauditorium). Cinema advertising can also range from a single slide to a full lengthaudio-visual commercial.

As well as advertising in cinemas, manufacturers can also use productplacement to promote their goods & services. Read more about it here.

Press & Publication

This category can be subdivided into
http://www.tivo.com/0.0.asphttp://www.pbs.org/cringely/pulpit/pulpit20030327.htmlhttp://www.apple.com/hardware/ads/http://www.icac.org.hk/eng/public/publ_av_6.htmlhttp://money.howstuffworks.com/product-placement.htmhttp://www.tivo.com/0.0.asphttp://www.pbs.org/cringely/pulpit/pulpit20030327.htmlhttp://www.apple.com/hardware/ads/http://www.icac.org.hk/eng/public/publ_av_6.htmlhttp://money.howstuffworks.com/product-placement.htm


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Magazine Ad - colour or b/w, in double, full, half or quarter pages. Some

magazines have a classified section which includes line and box ads. Newspaper Ad - colour or b/w, again in double (rare for a newspaper), full, half or

quarter pages. Many newspapers have a large classified section, sometimes as aseparate pull-out

Advertorial - an ad presented in editorial style, endorsing a product or service. Todistinguish between advertorial (i.e. paid for) and editorial content, the word"Advertisement" appears across the top of the advertorial

Poster - can be displayed indoors. Usually used by not-for-profit or government

organisations

Again, target audiences of advertisements must match the target audience of thepublication in which it appears.

Direct Marketing

This includes material which is sent directly to people's homes or offices -catalogues, brochures, mailing offers etc. And spam.

Packaging

Many advertising campaigns now involve a rehaul of product packaging anddesign, meaning that images and colors are consistent across both promotionand presentation.

Outdoor & Event

Outdoor advertising comes in many different forms. In a busy city, people maynot even glance at a standard poster, so in an advertising saturated world theagencies use many different tricks to get our attention. Advertising creeps ontohitherto unused spaces becomes larger, moves - anything to be different andeye-catching. This can be regarded as cultural pollution, as our cityscapes areplastered with paid-for messages. Or perhaps it just brightens up dull urbanareas with wit and creativity?

TELEVISION v/s ONLINE

Findings on television and internet advertising

Daily on the news online, we read how online search is outperforming traditional

media outlets such as mail, print, TV and radio. I think this makes a lot of sense.

Everything is online nowadays. Why wait for the radio to play your favorite song


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when you can hear it instantly online? Why wait for tomorrows paper or the ten

oclock new when you can have it delivered real-time with RSS feeds.

In an industry, things change at an extremely fast pace. By the time you print

something your competition could have already came out with a superior product

and has it online on their website within seconds. Compare that to snail mail.

How many clients are you losing currently due to old strategies? We admit print,

radio and TV still work and even more effective when combined with your

companies website address.

Coca Cola, Pepsi and other big players are realizing that they need to get an

online presence. We talk to a lot of businesses that think a website is enough. Or

its just for information. We are in an era of E-Commerce. Why not profit from

your company online, market your website and gain new clients. New companies

with a vision to grow fast realize that online is the way to go. Gateway started on

a farm by two brothers! They were not mailing out flyers nationally.

We are not saying not to use traditional means of advertising but just to re-

evaluate your current strategy. For instance in real estate, you can be a veteran

of 20 years, have many contacts and do all traditional advertising. We have someof the stuff lying around the house well admit. But how we are going to find a

house? The Internet, Google. The new generation wants information fast, and

lots of it to make an informed buying decision something a one page flyer cannot

show us.

Not to mention pay per click serves highly targeted ads for people actually

looking for your services so youre not wasting your marketing budget on people

who could care less.

As far as marketing dollars go currently online spend outweighs all traditional

media. Why? Because it works! Now let us see how it works by going through the

following survey,


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New Paradigm Global Survey shows the global power of connected youth

A comprehensive survey in 12 countries of more than 7,600 young people

between the ages of 16 - 29 shows that 77% of today's online youth would

sooner live without television than live without the Internet. China has the most

devoted young Internet users, with 87% choosing the Internet compared to 13%

favoring television. In the United States the figures were 77% for the Internet and

23% for TV.

The survey was conducted by New Paradigm, the Toronto-based think-tank

headed by business strategist and best-selling author Don Tap Scott. The survey

is part of a $4 million study of today's digital-savvy youth - dubbed the "Net

Generation" by Tap Scott - who have grown up "bathed in bits."

Other survey findings include:

When asked to choose whether they want to be smarter or better

looking, 69% of the world's N-Genres choose being smarter

When evaluating a potential employer, 88% of N-Genres in China say a

companys prestige is important. This figure drops to 83% in India, 72% in

Russia, and 51% in the US.

56% of the world's online youth would prefer to make the world a better

place than to improve their local community.

73% of the N-Gen globally says that if a company makes untrue promise

in its advertising, they will tell their friends not to buy it products.

52% say that teens and young adults are portrayed too negatively in

today's media.


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Commenting on why so many N-Genres choose the Internet over TV, Tap Scott

said that television is unidirectional and passive, and doesn't allow meaningful

participation by the viewer. In contrast, the Internet enables users to find and

share information and take action.

"Look at Live Earth concerts this past weekend," said Tap Scott. "More than

10,000 'Friends of Live Earth' events were pulled together in 130 countries.

People around the world could go online for background materials, event

guidelines, and suggestions for running a green event, advice on how to receive

a concert satellite feed, and updates when additional materials such as short

films became available. Television can't do these sorts of things.

"Rich multi-media sites such as LiveEarth.org and Al Gore's

AllianceForClimateProtection.org show how the Net Generation can employ

digital tools to make a difference. While high-profile media events like the live

earth concerts help rise awareness, the global warming battle will be won in the

trenches of the internet.

Further findings of the global survey were released today in Boston at a

conference about the Net Generation for New Paradigm's clients. Twenty of theworld's leading companies are sponsoring the N-Gen study, including Nokia,

MetLife, FedEx, Accenture, Cisco Systems, and MasterCard.

About New Paradigm

New Paradigm is a think tank headed by IT strategist, speaker, and best-

selling author Don Tap Scott (Wikinomics, Growing up Digital). Since 1993 New

Paradigm has provided clients with insightful, thought-provoking analysis of

emerging technology trends and their impact on business, and serves as a

"strategic early warning system" for clients, helping them distinguish real

imperatives from all the hype and noise.

About the New Paradigm Global Net Generation Survey


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This survey was conducted online between April 5 and May 3, 2007 among

7,692 respondents in 12 countries (U.S., Canada, U.K., Germany, France, Spain,

Mexico, Brazil, Russia, China, Japan, and India). Figures for age, sex,

race/ethnicity, and region were weighted where necessary to bring them in line

with their actual proportions in the population.

All sample surveys and polls, whether or not they use probability sampling, are

subject to multiple sources of error which are often not possible to quantify or

estimate. With a pure probability sample of 7,692 respondents one could say with

95% probability that overall results would have a sampling error of +/- 1.1

percentage points. This online survey is not based on a probability sample and

therefore no theoretical sampling error may be calculated.

Current practice

Marketers are proportioning as much as 20% of their advertising budgets to on-

line marketing, and they, as well as their clients, are interested in how on-line ads

compare to TV advertising and affect brand image.

While TV ads are long, disruptive and easily avoidable, Most of the on-line

advertising is concise and must be watched, whether it is a banner ad on a

website or a mini-commercial before an online program begins. Also, using

targeted ads online means that different viewers see different advertisements on

the same page.

Marketing research companies like IAG Research and ARSgroup have

developed different methods to gauge how effective ads are in TV and the

Internet.

IAG uses incentive-based internet polls to see what TV ads viewers

remembered, and they place cookies on hard drives so they know when

panellists are exposed to an online ad. ARSgroup tests how engaging ads are in

TV, internet and movie theatres.
http://www.iagr.net/http://www.ars-group.com/http://www.iagr.net/http://www.ars-group.com/


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The use of these tools is still in its infancy, but recent research suggests online

advertising is more effective.

NBC conducted an online survey of its NBC Rewind viewers and says its internet

ads elicit higher brand recall than those on TV. They found that the ads are more

entertaining, engaging and, most importantly for the viewer, less disruptive.

Peter Naylor, senior VP of digital media sales at NBC Universal said, These

research results show that when the right message is tailored to the right

medium, this engaged audience really responds and our advertisers win.

These results combined with the Internets growing presence in everyday life

may lead to online advertising becoming more important than TV ads.

ONLINE ADVERTISING

While online advertising has grown significantly as and industry, to many marketers it isstill relatively new. Some struggle to understand it in terms of an existing media frame ofreference. Should online be viewed in a print paradigm since it employs small ads, mixedin with content, on a page? Or should a direct response model be applied to onlinebecause of its interactivity? Most recently, the burgeoning video capabilities of online

have encouraged some advertisers to liken it to television. Trying to force fit onlineadvertising into a pre-existing; one-silo media model may sometimes be useful. Forexample, an advertiser planning to redeploy a print budget online might reasonably useprint metrics for the purposes of comparison. But thinking about the online channelmerely as an extension of print, and a way to reach people not hit by traditional media,obscures the larger opportunity that online represents.

Our existing advertising models (TV, print, outdoor, etc.) are predicated on a particularmode of message transportation and a send-receive approach. Traditionally, strategy andchannel have gone hand-in-hand. A crude synopsis might be: Use TV and outdoor forreach and awareness, print for beauty shots and targeting, radio for deal-selling, anddirect mail for a call to action. While a model could be cobbled together for online (printmeets direct mail meets TV), the complexity would limit its usefulness. Instead of amodel, think of a metaphor: fishing from a boat on a digital ocean. You cant put a net inonly one place, but you can cover only so much ground. Marketers have to be flexibleabout the fluidity of the medium and work with the different underlying currents. At thisstage, the best approach to online marketing is to jump in, try some things, and see whatworks. The marketers who have been most successful so far are those who haveembraced the power shift that is occurring. Consumers have more control now, over both
http://www.nbc.com/http://www.nbc.com/


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what gets to them and how they interact with it. Because of this ongoing transfer ofpower, the approach that worked last year might not work this year. As the climatechanges and the fish get smarter, new approaches are required. Rather than continuing tomonitor send-and-receive and impressions, marketers now need to be measuringengagement and digital dialogue.

ONLINE ADVERTISING PROGRAMMEThere are plenty of ways to make money on the Internet; one of the best of these isAffiliate Advertising or Online Advertising. This is a business that is rapidly gainingpopularity as a way of making money on the Internet. Affiliate Advertising or OnlineAdvertising helps to develop powerful brands which in turn also helps to build a goodrelationship with Online Customers.

Online Advertisements direct consumers to the seller's website through Affiliates whopromote marketing of their products. So by this way all of them stand to benefit. Sellersproducts are marketed, Affiliates in turn earn their commissions for the sale & consumers

get their products online. There is lot of products like Online Shopping at Amazon.com,Online Shopping in eBay India, Shopping Mall in eBay Singapore, Shopping Mall ineBay Italy, International Tours & Travels, and Home & Outdoor Products from Buy.com,etc.

ADVERTISMNET CAMPAIGNCoordinated series of linked advertisements (broadcast usually through several mediachannels) that

focus on a common theme and one or few brands or products,

are directed at a particular segment of the population (targeted audience),

One of the leading Indianmatrimonial web siteadvertising on timesjobs.com


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are aimed at achieving a specific objective (such as awareness or market share).Successful advertising campaigns achieve far more than the sporadic advertising, and

may last from a few weeks and months to years.

ADVERTISING NETWORKA network representing many Web sites in selling advertising, allowing advertisingbuyers to reach broad audiences relatively easily through run-of-category and run-of-network buys.Advertising networks provide a way for media buyers to coordinate ad campaigns acrossdozens, hundreds, or even thousands of sites in an efficient manner. The campaigns ofteninvolve running ads over a category (run-of-category) or an entire network (run-of-network). Site-specific buys are not a major emphasis when dealing with advertisingnetworks. In fact, site-specific buys are not even available at some networks, so as not toconflict with in-house sales reps.

Ad networks vary in size and focus. Large ad networks may require premium brands andmillions of impressions per month. Small ad networks may accept unbranded sites withthousands of impressions per month.

One of the key issues for publishers is exclusive vs. non-exclusive representation.Exclusive representation generally brings a higher percentage of revenue sharing, butsometimes results in a smaller percentage of ad inventory being sold. In non-exclusivearrangements, publishers may use secondary advertising options to fill the space leftunsold by the primary ad network.

AD SENSEAd Sense is the program that gives advertising revenue from each page on websitewitha minimal investment in time and no additional resources.

Ad Sense delivers relevant text and image ads that are precisely targeted to particular siteand particular site content


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AD WORDSWeb site owner can display his/her ads on another web site and host advertising network.Money transaction take place only if people click on ads.

How ad words work on Google

GUEST SITE CREATE ITS ADSYou create ads and choose keywords, which are words or phrases related to your business. Get keyword ideas

GUEST SITE ADS APPEAR ON GOOGLE
https://adwords.google.co.in/select/KeywordToolExternal?defaultView=2https://adwords.google.co.in/select/KeywordToolExternal?defaultView=2


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When people search on Google using one of your keywords, your ad may appear next tothe search results. Now you are advertising to an audience that is already interested inyou.

GUEST SITE ATTRACT CUSTOMERS

People can simply click on your ad to make a purchase or learn more about you.

BANNER ADVERTISMENTA web banner or banner ad is a form of advertising on the World Wide Web. This form ofonline advertising entails embedding an advertisement into a web page. It is intended toattract traffic to a website by linking them to the web site of the advertiser. Theadvertisement is constructed from an image (GIF, JPEG, PNG), JavaScript program ormultimedia object employing technologies such as Silverlight, Java, Shockwave or Flash,often employing animation or sound to maximize presence. Images are usually in a high-aspect ratio shape (i.e. either wide and short, or tall and narrow) hence the reference tobanners. These images are usually placed on web pages that have interesting content,such as a newspaper article or an opinion piece.

The web banner is displayed when a web page that references the banner is loaded into aweb browser. This event is known as an "impression". When the viewer clicks on thebanner, the viewer is directed to the website advertised in the banner. This event is knownas a "click through". In many cases, banners are delivered by a central ad server.

When the advertiser scans their logfiles and detects that a web user has visited theadvertiser's site from the content site by clicking on the banner ad, the advertiser sendsthe content provider some small amount of money (usually around five to ten US cents).This payback system is often how the content provider is able to pay for the Internetaccess to supply the content in the first place.

Web banners function the same way as traditional advertisements are intended tofunction: notifying consumers of the product or service and presenting reasons why theconsumer should choose the product in question, although web banners differ in that the


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results for advertisement campaigns may be monitored real-time and may be targeted tothe viewer's interests.

Rectangular and pop-up adsheight by width

(inpixels)

Large rectangle 280 by 336

Medium rectangle 250 by 300

Square pop-up 250 by 250

Vertical rectangle 400 by 240

Rectangle 150 by 180

Banner and button ads

Leaderboard 90 by 728

Full banner 60 by 468

Half banner 60 by 234

Button 1 90 by 120

Button 2 60 by 120

Micro bar 31 by 88

Micro button 15 by 80

Vertical banner 240 by 120

Square button 125 by 125

"Skyscraper" ads

Skyscraper 600 by 120

Wide skyscraper 600 by 160

Half-page 600 by 300

PRACTICALLY SIZES MAY DIFER ACCORDING TO WEB PAGE LAY OUT LIKEDIFFERENT BANNERS USED BY GOOGLE ARE

Banner (468 x 60)

SQUARE (200*200)
http://en.wikipedia.org/wiki/Pop-uphttp://en.wikipedia.org/wiki/Pixelshttp://en.wikipedia.org/wiki/Pop-uphttp://en.wikipedia.org/wiki/Pixels


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Half Banner (234x60)

Small Rectangle (180x150)

Vertical Banner (120 x 240)
https://www.google.com/adsense/static/en_GB/Banner.html


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TEXT AD

It is an advertisement way using text-based hyperlinks.
https://www.google.com/adsense/static/en_GB/WideSkyscraper.html


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Text-based ads, although common in email, have been dominated on the Web by theirgraphical-based counterparts. Affiliate marketing is one area where text ads haveflourished. However, many mainstream advertisers are only beginning to discover thepower of text. Google has caused a buzz with its text advertising options, generating aself-proclaimed "click-through rate 4-5 times higher than industry standard for banner

ads." While lacking some of the advantages of graphical ads, text-based ads have somepowerful advantages of their own. They download almost instantly and are not affectedby ad blocking software.

IMAGE ADSThese ads contain gif, jpeg images. These images are able to get more attraction than textadvertisements. These advertisements are generally used to left impression on surfersmind or to remind the brand or product.

Leader board (728 x 90) -View sample placements

BUTTON

SQUARE(250*250)
https://www.google.com/adsense/static/en_GB/Leaderboard.htmlhttps://www.google.com/adsense/static/en_GB/Leaderboard.htmlhttps://www.google.com/adsense/static/en_GB/Leaderboard.htmlhttps://www.google.com/adsense/static/en_GB/Leaderboard.html


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Leader board (728 x 90)

Banner (468 x 60)

Small Square (200 x 200) Medium Rectangle (300 x 250)

VIDEO ADSThese are represented as image ads but on click processor start buffering on site surfersmain memory. Buffered data contains information about advertiser and many other
https://www.google.com/adsense/static/en_GB/Inline.htmlhttps://www.google.com/adsense/static/en_GB/Banner.htmlhttps://www.google.com/adsense/static/en_GB/Leaderboard.html


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information related to product. These ads are useful when targeted customer is reallyinterested and intending to purchase.

Small Square (200x200) Square (250x250)

Bufferin

Skyscraper 120x600 Skyscraper 120x600

Leader board 728*90


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Rectangle (300x250) Large Rectangle (336x280)

PRICING STRUCTUREDetails of different prices and discounts offered on different order sizes.


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THIRD ADVERTISING PARTY PRICING STUCTUREDifferent models are used to generate revenue.

Pay per click

Pay per click search engine

Pay per sales Pay per lead

CPM

PAY PER CLICK (CLICK THROUGH)It is an Online advertising payment model in which payment is based solely on qualifyingclick-through.

In a PPC agreement, the advertiser only pays for qualifying clicks to the destination sitebased on a prearranged per-click rate. Popular PPC advertising options include per-clickadvertising networks, search engines, and affiliate programs.

Paying per click is sometimes seen by some as a middle ground between paying perimpression and paying per action. When paying per impression, the advertiser assumesthe risk of low-quality traffic generated by the publisher. When getting paid for actions,the publisher assumes the risk of low-converting offers by the advertiser. In the PPCmodel, the publisher does not have to worry about the sales conversion rate of the targetsite, and the advertiser does not have to worry about how many impressions it takes toattract the specified number of clicks.

PAY PER CLICK SEARCH ENGINE

Search engine where results are ranked according to the bid amount, and advertisers arecharged when a searcher clicks on the search listing.

Advertisers supply the following details:Listing - includes title, description, and URL.Keywords - the keywords that apply to the listing.Bids - amount paid per click (varies by keyword).

When a search is performed, the first search engine listing is the one with the highest bidfor that keyword. The ranking of listings continues from highest to lowest bids. A higherranking generally brings more traffic.

Critics claim that PPC search results are not useful in finding information. The claim isoften made that paid results are tainted and contrary to the very essence of the Web.

Proponents of PPC search maintain that the free market is effective in bringing the bestresults to the top, at least for commercial searches. In theory, the highest bids will be heldby the best companies for each keyword, because a company's ability to bid is determinedlargely by its conversion rate.


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From a marketing perspective, it is important to determine which PPC search enginesgenerate sufficient quality and quantity of visitors for a particular product category.

In this type of advertising price structure auction is continuous process it keeps on

changing the bid price and results of searches. Search results are shown through apredetermined algorithm.

PAY PER SALES

Online advertising payment model in which payment is based solely based on qualifyingsales.In a pay per sale agreement, the advertiser only pays for sales generated by thedestination site based on an agreed upon commission rate.

Paying per sale is often seen as the payment model most favorable to advertisers and leastfavorable to publishers. In such an agreement, the publisher must not only be concernedwith the quality and quantity of his or her audience, but also the quality of the advertiser'screative units and destination site.

If possible, many publishers avoid sales-based agreements, preferring to stick to the CPMmodel. However, some publishers, facing weak ad sales, have little choice but to acceptsales-based agreements to utilize remnant space.

For advertisers, pay per sale has some unique advantages compared to pay per click andpay per lead. There are fewer concerns about whether conversions are legitimate, andwhether traffic is incentive or of low quality.

PAY PER LEADOnline advertising payment model in which payment is based solely based on qualifyingleads.In a pay per lead agreement, the advertiser only pays for leads generated at theirdestination site. No payment is made for visitors who don't sign up.

A lead is generally a signup involving contact information and perhaps somedemographic information; it is typically a non-cash conversion event. A lead may consistof as little as an email address, or it may involve a detailed form covering multiple pages.

One risk to the advertiser is the potential for fraudulent activity by incentivized 3rd-parties or marketing partners. Some false leads are easy to spot. Nonetheless, it isadvisable to make a regular audit of the results.

CPMIt is cost per thousand model.


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The CPM model refers to advertising bought on the basis of impression. This is incontrast to the various types of pay-for-performance advertising, whereby payment isonly triggered by a mutually agreed upon activity (i.e. click-through, registration, sale).

The total price paid in a CPM deal is calculated by multiplying the CPM rate by the

number of CPM units. For example, one million impressions at $10 CPM equals a$10,000 total price.

1,000,000 / 1,000 = 1,000 units1,000 units X $10 CPM = $10,000 total price

The amount paid per impression is calculated by dividing the CPM by 1000. Forexample, a $10 CPM equals $.01 per impression.

$10 CPM / 1000 impressions = $.01 per impression

MODE OF PAYMENTGenerally third party advertisers follow payment threshold model.

PAYMENT THRESHOLDThe minimum accumulated commission an affiliate must earn to trigger payment from anaffiliate program.

Payment thresholds involve two factors:

(1) Minimum payment - $25, $50, $100, etc.(2) Time interval - monthly, quarterly, etc.

At the specified time interval, accumulated commissions for each affiliate are comparedto the minimum payment level. If an affiliate fails to meet the minimum payment level,the amount is rolled over to the next period. This continues until the accumulatedcommission is greater than the minimum payment level. When this happens, payment issent a certain amount of days after the end of the period, as specified in the contract.

RATES OF BANNERSRates of banners are dependent upon

(i) Size and shape of banner (rectangle/ button/ square/ sky scraper/ leader board)(ii) Type (text add/ image add/ video add/ flash)(iii) Ad- space (Header of site/ left of the site/ right of the site/ at one or two scroll)(iv) Page number on a web-site (home page/ content page /linked pages)


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Tools in use to describe rates of banners are rate card or negotiations ( auction or biding)

RATE CARDIt is a document detailing prices for various ad placement options.

While a rate card lists ad prices, among other things, it might be a disservice to regard itas a fixed price sheet. In some respects, the rate card functions as a PR piece, as sitesattempt to position their starting CPM rates in line with sites of a similar stature.

Currently, few sites are fetching the prices listed on their rate cards, and manynegotiations begin at significantly less than the listed price. The stability of the price isdirectly tied to the supply demand for a specific audience.

live project on online advertising industry

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