With more and more users connected to the Internet, online advertising has become a popular way to get the word out about businesses, products, services and events. Online advertising encompasses a large amount of advertising types and billing arrangements, and costs can vary considerably depending on the chosen ad channels, types and payment options.
The cost of online advertising varies considerably depending on the type of ad, advertising arrangement and advanced options like targeted delivery. Users can distribute some ads, like those that double as informative articles, at no cost. Fixed cost advertisements vary in cost depending on the size and popularity of the advertising website, and the price of pay-per-click advertisements depends on how many users actually click on the ad. In its AdWords help section, the search and advertising giant Google recommends that new advertisers start with a budget of around £6 to £32 per day, but variables like keywords, market segment and even geographic area may require considerable adjustment to these amounts.
In addition to paying a fixed amount for ad display, as was common with traditional media like newspapers and television, online users have a number of other payment options available. Internet advertising consultant Simon Cotter notes that popular payment arrangements include pay-per-click, sometimes known as cost per click, CPC or PPC in which advertisers pay a set fee, typically between 5 cents and 60p as of October 2008, each time someone clicks on the advertisement. Similarly, cost per impression, cost per thousand or CPM advertising allows advertisers to pay a predetermined amount for every thousand displays of the ad. A less common option, known as cost per lead, requires advertisers to pay a fee for each sales lead generated or sale closed.
Online advertisers can select from myriad types of ads, and each ad type carries its own price tag. Types of online ads, according to the online advertising resource Web Advantage, include basic text ads, graphical display advertisements, pop-up ads that appear in front of other web pages, ads animated with flash technology and even website sponsorships. Some advertisers can craft and release video advertisements, and well-versed advertisers can create informative articles that double as promotional material. One type of advertisement, known as an interstitial ad, appears briefly while online videos or large web pages load.
Significant advances in technology have narrowed online advertising from broad dissemination and directed it to very specific, highly targeted audiences. Advertisers on search engines may choose to have their advertisements displayed when users search for certain key words, and social networking advertisers may opt to have an ad displayed to users who fall into targeted demographic groups or who list certain interests in their profiles. Because targeting limits advertising activity to a smaller audience, targeted ads can help reduce overall advertising costs.
Online advertisers who choose not to pay advertising costs can employ some alternatives to market online material. According to the e-commerce consultant Dr. Ralph Wilson in a 2009 article for Web Marketing Today, users may choose to simply hire a professional public relations firm to handle marketing and publicity activities. In addition, webmasters may choose to shift their efforts from advertising to optimising the website to appear high in search engine rankings, as highly ranked websites can attract more visitors even without ads.