INTERNET ADVERTISING

In the early days, when static content was used over the internet, any hyperlink from one site to another could be considered as advertisement for the other site. Formally, Internet advertising began in 1994, when the first commercially available Web browser, Netscape Navigator 1.0, was released and the first banner ads were sold (Hotwired, 1994).

The revenue from advertising on the web has increased by many folds in the past few years. These increases have benefited companies such as DoubleClick and Neilsen media.

The spending of ad money over the net has also increased significantly. For the year 2000, various analysts have forecasted different target figures.

While ad banners remain the predominant advertising vehicle on the Web – accounting for approximately 54% of total online advertising revenues – the increased use of content sponsorships and interstitials, micro-sites, etc. almost doubled during last year’s second quarter, marking a shift towards more creative advertising on the Web.

	Banner
	Banners have proven to be the most effective direct marketing tool, producing quantifiable units to which an advertiser can apply readable metrics and make real conclusions with real numbers about the effectiveness of their campaign. In the early days click through on banner ads was much higher due to the novelty of the web. The click throughs have been decreasing as shown in the graph above. On the other hand, Millward Brown Internationals study proves banner ads have significant and conclusive impact on brand awareness. Further findings also show that single exposure to a web banner generates great awareness than a single exposure to a TV or print ad
	Sponsorship Advertising
	Sponsorships were the first means by which advertisers could get real estate online. Sponsorships of online content are much like event sponsorships: the hope is that users will more closely associate the content with the advertiser (e.g., Advil’s sponsorship of ESPN Sportszone’s Injury Report, Oldsmobile’s sponsorship of AOL’s Celebrity Circle) If an advertiser has a strictly branding/awareness goal, sponsorships are an efficient way to achieve this marketing objective for a lower cost than traditional print.
	Classified on the Web
	The growth of online classifieds poses the largest threat to newspapers, which derive a significant portion of their revenues and profits from print classifieds. Classifieds translate well online, leveraging the inherent strengths of the medium, including searchability and database functionality, faster updated listings and more flexible word-and-line spacing relative to print. While major web sites and consumer online services are moving toward business models driven by multiple revenue streams - subscription, syndication, licensing, transaction, brand leverage or brand development. Advertising has remained the most predominant for online publishers.

Further, online advertisers will continue to demand more powerful advertising models that better capture and sustain user attention, like the emergence of real digital audio/video approaching the standard-setting slickness of television commercials

Evolving Web advertising models build relationships that promote unique user involvement and personalization, while at the same time accommodate the traditional advertising objectives of reach and frequency, in an effort to develop and enhance brand recognition.

With online demographics becoming more diverse and targeting becoming more precise, advertiser spending on the Web clearly moved out of its experimental stage during the past year. U.S, online advertising spending is currently around $5 billion but expected to go over $20 billion by 2004.

Factors contributing to this growth include an increase in budgets devoted to online advertising, improvements in Web content and entertainment, growth in cross-promotion of Web sites in other media (e.g., TV, print and radio) and the emergence of "cyberbrands."

The increased concentration towards online advertising seems also due to the demographics showing that the hard to reach, well-educated, young and high-income population, coveted by the marketers, represent the internet audience.

As with other media, the development of the Internet as an advertiser-supported medium will be directly tied to its ability to deliver qualified audiences to marketers. To date, all signs point to this continued development, and while growth in online advertising may not be smooth, it should continue to flourish into the next millennium.