This week, we offer relevant and current data that illustrates the growing importance and presence of online marketing.
Marketing on the Internet is different than direct mail or print media marketing in that it combines the forces of traditional marketing with sophisticated technology that observes and tracks users' online habits and interests, matching them with advertisements to best serve their preferences. Extremely popular as a method for businesses to promote their products and services, online advertising is cost-effective and allows businesses to communicate in a much more interactive way to potential customers than most traditional forms of advertising.
With the growing number of online users, the audience of online advertising is anticipated to be huge. Businesses can capitalize on this by using the internet to keep in touch with customers through newsletters, chat rooms, and promotions on their websites.
Best Performing Online Advertising Tactics in 2006, according to US Online Marketers:
|
Best Performing
|
2006
|
| Paid search ads |
49%
|
| E-mail - house list |
47%
|
| SEO (search engine optimization) |
45%
|
| Behavioural targeting |
34%
|
| Contextual targeting |
29%
|
| Rich media ads (audio/visual) |
28%
|
| Affiliate marketing |
25%
|
| Pop-ups and pop-unders |
15%
|
| Ads in e-mail newsletters |
13%
|
| Banner ads |
12%
|
| E-mail - rented lists |
11%
|
Source: Marketing Sherpa, Inc., January 2007
Online Advertising Tactics given a 5% budget investment increase in 2006, according to US Online Marketers:
| Search marketing |
34%
|
| E-mail marketing to in-house lists |
27%
|
| Rich media (streamed audio/video) |
25%
|
| SEO |
25%
|
| Contextually targeted ad buys |
22%
|
| Traditional banners |
20%
|
| Behaviour-targeted online ad buys |
18%
|
| Affiliate marketing |
14%
|
| E-mail to third-pary lists |
10%
|
Definitions and terms:
| Affiliate marketing is a web business promotion method in which an affiliate is rewarded for every visitor, subscriber, customer, or sale gained through their efforts. Compensation is often based on a certain value for each visit (ie. Pay per click), registrant, or new customer. Some businesses run their own affiliate programs while others use third party services to track traffic or sales that are referred from affiliates. Marketing Sherpa estimated that in 2006 affiliates would earn $6.5 billion, worldwide, in commissions, and the three sectors expected to experience the greatest growth in this market are mobile phones, finance and travel. |
| Behavioral targeting is a technique used by online advertisers to increase the effectiveness of their campaigns. In this technique, a user’s online behavior is observed anonymously and then the most relevant advertisement is selected based on their behavior. This helps advertisers deliver their online advertisement to the users who are most likely to be influenced by them. |
| Contextual advertising applies to ads appearing on websites or other media (ie. content displayed in mobile phones) where automated systems select appropriate advertisements based on the content displayed or requested by the user. Contextual advertising has made a major impact on the earnings of many websites. A large part of Google's earnings, for example, are from contextual ads. |
| SEO (search engine optimization) is the process of increasing the amount of visitors to a website by their ranking in the search results of a search engine. The higher a website ranks in the results of a search, the greater the chance that that site will be visited by a user. Since users will typically not click through pages and pages of search results, where a site ranks in a search is essential for directing more traffic to the site. According to Wikipedia, SEO is marketing through algorithms - helping to match visitors with the appropriate websites they are interested in finding. |
Source: www.wikipedia.org
Emerging Advertising Tactics budgeted for 2007, according to US Online Marketers:
| Ads of 3rd party blogs and networks |
42%
|
| Social networking |
40%
|
| Adding RSS feeds |
37%
|
| Video ads |
37%
|
| Sponsoring podcasts |
18%
|
| Mobile/wireless |
16%
|
| Ads in RSS feeds |
15%
|
| Product placement in video games |
9%
|
Source: Marketing Sherpa, Inc., January 2007
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