Online Advertising Intermediary: How Online Advertising Works?

Online Advertising Intermediary: How Online Advertising Works?

Payam Hanafizadeh (School of Management and Accounting, Allameh Tabatab'i University, Tavanir, Tehran, Iran), Mehdi Behboudi (Department of Business Management, Islamic Azad University, Pounak, Qazvin, Iran) and Hamideh Mokhtari Hasanabad (Management and Productivity Research Center, Islamic Azad University, Pounak, Qazvin, Iran)
Copyright: © 2014 |Pages: 10
DOI: 10.4018/ijom.2014010103

Abstract

Applying bleeding edge courses of action in advertising is always a case on the table of decision makers. In online case, lack of a practice to place right advertisement in a right time for the right user has been counted as biggest challenage. On the other hand, “ad clutter”, the key criticism on online advertising; is about to put online advertisement's benefits away and annoying users more than before. Accordingly, this article aims at scrutinizing this critical problem by incorporating one of the next generation technologies, Lead Generation. This study introduces an e-business framework in advertisement intermediating in the form of a framework so that lets advertisers advertise in customized way. In this approach, the authors focused on displaying a personalized ad for each user by which marketers could redirect their visiting prospects into becoming their own consumers. At the end, the managerial implications are reported.
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Online Advertising: Forming A New Platform

In June 2012, the world population was about 7 billion from whom 2 billion were Internet users. This statistics shows a 566.4% growth from 2000. The Northern America with 78.6% Internet users, has the highest penetration rate of Internet and Asia with 27.5% users is in the seventh position (Internetworldstats.com, 2012). These statistics referring to the importance, penetration percent, and use of Internet among users from around the world, show the increasing trend of using this medium throughout the globe. On the other hand, statistics published in (2012) at the Internet World Stats indicate that the penetration of Internet in small countries like Iceland, Norway, Estonia, etc. is increasing. Hence, the medium of Internet has changed into one of the most powerful communication channel among countries.

On the one hand, other more congruent view are being formed among users that websites can be used for meeting daily needs like getting information about new products (Li et al., 2006). On the other, studies reveal that lack of six factors leads to breakdown of newly-emerging websites. According to Hanafizadeh and Behboudi (2012) factors like government support, inseparability of website management, marketing management of the website, and lack of an appropriate business model contribute to the failure of these websites. Lack of a business model makes websites that have managed to attract a good traffic accept advertisement in any way possible. This is the main problem, because although advertising initially creates incomes for them, after a while, due to excessive cluttering of the website (being full of ads), the companies will not be willing to place ads in those websites. In this process, both Internet advertising industry is damaged and loses its unique feature, i.e. “interactive and personalized advertisement”, and companies offering ads will not be interested in using this channel. Although these companies seek a communication channel to their own websites (by placing their banner in a high traffic website), they have found out that users entering their websites (navigated from the advertising website to the advertised one) are not appropriate users of that website and leave it without showing any reaction to persuasive icons. In this regard, the problem is lack of a proper advertising mechanism which specifies how an advertisement appropriate to an individual is published, and how an appropriate individual is targeted rather than any person present in the website. This would reduce the boredom from ads and facilitate the navigation of appropriate individual to appropriate website. In other words, a specialized user is transferred to the specialized company offering ads, that is, a user who is ready for shopping surfs the web, not any users. Considering the necessity of an advertising intermediary e-business model, the present study tries to reach the following objecctive: Introducing an framework for online advertising intermediary.

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