The development and impact of web advertising

research paper on online advertising pdf

We characterize the impact of greater consumer switching on outlet profits as well as the impact of technologies that track consumers both within and across outlets on those profits. But the intriguing marketing experiments taking place on and off the Internet suggest it is time for consumer marketers to begin looking to networks for new ways of thinking about the marketing theories and approaches on which they have long relied - and to begin capturing the lessons Internet advertising holds for all their advertising practices, online and conventional.

A deep understanding of enabling technologies will become a prerequisite for fresh forms of advertising.

impact of online advertising

Their view is probably a reaction to the early hype about the Internet and the World Wide Web, which created unrealistic short-term expectations among marketers and frustration with the inadequacies of the delivery technologies among consumers. Or might it transform consumer marketing in the same way that network television revolutionized consumer culture and commercial practice four or five decades ago?

The effectiveness of internet advertising on consumer behaviour pdf

But the intriguing marketing experiments taking place on and off the Internet suggest it is time for consumer marketers to begin looking to networks for new ways of thinking about the marketing theories and approaches on which they have long relied - and to begin capturing the lessons Internet advertising holds for all their advertising practices, online and conventional. We believe that Internet advertising will account for a growing proportion of overall advertising expenditure. Offering consumers value in return for information will become vital in eliciting their preferences, which in turn will be critical to customizing advertising. New capabilities will be required as creative production speeds up and becomes more closely integrated with marketing activity. One consequence is that multi-homing on the part of advertisers is heterogeneous: high-value advertisers multi-home, while low- value advertisers single-home. The presence of switching consumers means that, in the absence of perfect technologies for tracking the ads seen by consumers, advertisers purchase wasted impressions: they reach the same consumer too many times. A number of fundamental forces are currently reshaping Internet advertising: the near-daily emergence of new technologies that improve measurement, targeting, and data interpretation; the strenuous efforts of primarily entrepreneurial marketers to make business use of the Web; and the establishment of patterns in consumers' use of these new interactive networks. Caution: Changes ahead Looking at today's Internet advertising to predict what tomorrow will bring is about as helpful as using a rear-view mirror to watch the road ahead. As the technology improves, the impact of Internet advertising will increase and become easier to measure, and the gap between this new precise, interactive marketing capability and conventional "fuzzy" passive media will widen. Most see it as little more than a complement to traditional marketing practices, and don't expect it to reduce expenditure on broadcast and print media or change the form, pricing, or delivery of advertisements. Over the next few years, advertising agencies and consumer marketers will be under pressure to change their whole approach to marketing communications. Somewhat surprisingly, superior tracking technologies may not always increase outlet profits, even when they increase efficiency. We take a contrary view. Moreover, advertising - and marketing in general - will adopt practices first developed or deployed on the Internet. Introducing a paywall does not just diminish readership, but it furthermore reduce advertising prices and leads to increases in advertising prices on competing outlets.

Marketers will become more accountable for their results, and they will pay more attention to building a total customer relationship.

We take a contrary view. The economics of Internet advertising are likely to make current business models obsolete. Will the Internet have as big an impact on advertising as radio and television did?

influence of online advertising

Is it just another emerging niche medium with some peculiar creative capabilities and constraints? For ad agencies, fees based on results will become standard. Most see it as little more than a complement to traditional marketing practices, and don't expect it to reduce expenditure on broadcast and print media or change the form, pricing, or delivery of advertisements.

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The Impact of the Internet on Advertising Markets for News Media