Internet Advertising

Internet Advertising

DOI: 10.4018/978-1-4666-0885-6.ch002
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Abstract

The ideal advertisement is one that has the best possible reach within a well-organized range of customers (selectivity) with proper possibilities of feedback and low cost. Conversely, mass communication often forces the marketer to accept high reach with relatively low selectivity and no feedback opportunities while achieving reasonable cost-effectiveness (Steptrup, 1991; Thomsen, 1996). The marketer’s challenge is to decide which medium, or combination of media, can best achieve the advertising goal for the company. This chapter provides an integrated definition of Internet advertising, describing its features and advantages. Additional discussion involves the emergence of Internet advertising, statistics of incomes, and costs. Finally, the chapter explains how marketers should select the right website for their advertising placement.
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The Internet

The Internet is the most important medium for the 21st century. The Internet consists of scattered computer networks which are linked internationally, working on global communications protocols. In 1968, the United States Defense Department established a new system called the Advanced Research Projects Agency NETwork (ARPANET). This new invention was a communications system developed to link governmental and military sites to one another. For security purposes, the Internet was designed in a way that no organization or country could have control over it.

The next step for the Internet was in academic organizations. It served the science and education fields as an electronic library for information exchange through online discussions. At first, the structure of this new medium was quite basic, utilizing mostly text. Moreover, the lack of a well-designed software system meant that the communication process was extremely slow.

In 1990, after the development of the World Wide Web by Berners-Lee, the Internet entered a new arena. This new innovation allowed users to view pictures, photos and artifacts, and also send them to each other. Using pages, websites developed rapidly, and by 1994, nearly three million web-pages had been created with informational, entertainment and advertising purposes. Due to this rapid growth, the Internet evolved from an individual environment to a commercial communications environment. By 1996, 89% of the websites belonged to commercial companies.

The Internet is innately a flexible medium; furthermore, it appears to be a powerful tool for the transfer of information. The advantage of flexibility allows the Internet to provide marketing communications tools such as e-mail, chat rooms, communities, forums and news groups.

The popularity and growth of the World Wide Web grew much faster than other media; five years was enough time for the new medium to attract 50 million users (Meeker, 1997). Compared with radio (30 years) and TV (15 years), this statistic reveals the incredibly fast development of Internet diffusion (Sterne, 1997). As Berthon, Pitt, and Watson highlight, “The Web is not a transient phenomenon. It warrants serious attention by advertising academics and practitioners. Statistics support this, although one astute observer recommends strongly that all estimates be made in pencil only, as the growth is so rapid. No communication medium or electronic technology, not even fax or personal computers, has ever grown as quickly” (Berthon, Pitt, & Watson, 1996, p. 44).

Nowadays, the Internet is a part of everyone’s life, and for many customers, the Web has become the major medium for consumption (Morris, Woo, & Cho, 2003). The Web is not only being realized by consumers, it is increasingly being accepted by marketers as well (Prasad, Ramamurthy, & Naidu, 2001) (see Figure 1).

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