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Online Advertising

Online advertising can be broken down into a few key areas of interest. These areas of interest are not exclusively the only areas of online advertising available to you, however they represent the most popular items on the online advertising menu.

Search Advertising:
40% of the total spend last year. This relates to keyword based search engine optimization and paid advertising via pay per click campaigns. The three biggest sources of this type of advertising are Google, Yahoo, and MSN. There are plenty of additional smaller pay per click advertising sources but the big three represent 98% of the market, so why do you really need any more. The beauty of search engines is that they make it so easy to purchase traffic, either directly from them or from their affiliate sites. In fact online advertising is now a question of click, setup, and pay. All you need to do is select the appropriate keyword(s) for your service offerings, select the geographic region you want to service and away you go. Note that search advertising is paid per visitor so if your ad is not clicked on you pay ZERO. Experts refer to this type of advertising as an outstanding deal. Even Google will give you FREE processing for all the goods you sell online providing you are purchasing traffic from them and providing your ROI is less than or equal to 1,000 percent. Thanks Google!

Display Ads:
22% of the total spends last year. Banner or contextual advertising is still popular and is priced out on a cost per thousand impressions. Here you rent space on a web site and if you get lots of visitors to your site great since you pay for the space and not for the visitors. This is a risky way to advertise but there are plenty of places to get CPM deals and sometimes these deals work better than per visitor paid search advertising.

Classified Advertising:
18% of all spending last year or just over $3 billion dollars spent on classified advertising. So next time you say classifieds are not for your company or service offering you better think again. In terms of dollars spent last year classifieds came in at roughly half of the amount spent on keyword-based search. Classified ads run at a cost per space and not for visitors directed to your website.

Lead Generation:
8% of all advertising spending last year, or over $1.35 billion dollars. It is interesting to see Google use lead generation in some cases since we all know Google is getting short changed on their paid advertising (per click), and you know what? All the search engines are getting shortchanged on their pay per click services. Don't be surprised if one day the search engines come out with a revenue sharing model for their high-end PPC customers. That will be the day we all start purchasing search engine company stock. Is 500% ROI a normal rate of return for PPC advertising? We would argue that is a tiny bit one sided.

Rich Media: 7% of all spending last year or $1.183 billion dollars. This sort of relates to display ads, except that these ads are video targeted and most networks know that the targeting aspect alone will improve conversion rates. In advertising the better the targeting the higher value and the greater the advertising revenues. Could this be why Google bought youtube for over $1.5 billion dollars?

Holding on at 2% of total online advertising last year. Hard to believe email advertising accounted for $338 million dollars in revenues last year. That is a lot of money spent on email advertising.

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