The Future of Online Advertisements

We spent many blogs with you discussing what outlets online advertising has taken and the advantages/disadvantages of those routes. We have ranted on YOUTUBE, praised Facebook for its cheap and effective form of advertising and even followed the effects of online advertising through business value chains. But, what about the future? There are a few advertising directions that we see many business starting to utilize and these businesses will continue to broaden the horizons of these directions throughout the next few years.

According to Business Wire, a study conducted by Break Media, 70% of advertisers were going to increase their spending on digital video advertising. Although the spending amount on digital videos will vary with each company, this is, and will continue to be, a huge outlet for advertising. (In 2010 Google at the Interactive Advertising Bureau’s MIXX Conference in New York, entitled “Display 2015: Smart and Sexy.” explained why it sees the display advertising as "the biggest and most important revolution" in Ad's history. It made some predictions about already existed the cost-per-view and real-time bidding technologies as well as introduced some new ones as “TrueView.”, Google Goggles and ect. The more information about the Conference and related video can be found here:
http://googleblog.blogspot.com/2010/09/what-does-future-of-display-advertising.html ) 
The study also revealed that pre-roll over videos still dominate video advertisment formatting options at a whopping 60% and most advertisers prefer it. Pre-roll over videos are those advertisements that play before you can watch the video of your intent. Advertisers are partial to this form of advertising because the viewer is forced to watch the ad versus clicking "stop ad" [ See YOUTUBE post for more insight into this].
Another outlet for advertising that we foresee increasing in the future is the utilization of social media. Forbes magazine published an article in 2009 addressing this topic that, we feel, is still relevant today. One thing that stuck out was the encouragement of consumers to become the advertisement. You see this every day in clothing- the polo figure for Ralph Lauren or Hollister writing their name across all of their shirts. Forbes discussed this as the future for 2010 online advertising, but that was to early. For this to take hold like they were imagining, is going to take a few years. However, this is the future! If you look on Facebook, advertising is becoming huge. Pages are free. Various food chains like Chili's will post advertisements such as "like this for a free appetizer- offer ends this weekend". When the consumer likes the page, they get the freebie, but that page will show up on all of their friends walls- encouraging more to like the page. Once they like the page, Chili has an automatic market that they can keep up to date on specials etc. Advertisements like these are just starting to gain popularity, but we think that this will be one of the biggest outlets.
Overall, we see a great future in online advertisements. We see the consumer playing a much larger role and working collaboratively with the company to create larger marketing campaigns, for example the "likes" on Facebook. An opportunistic company by the name of Story Worldwide has even gone a step further and placed its advertising directly in the hands of the consumer. They focus more on the "story telling" approach of advertising and expect that users will contribute to the ad space with their own stories, pictures, videos. Some users have even re-created the stories posted by Story Worldwide and placed their own twist on the tale. http://www.youtube.com/watch?v=4NyXzir2yKg&feature=related


Now that we've summed up many topics in the online advertising world, we would like to open the blog to you, the viewers. What do you see in the future of online advertising?


Reference:


Forbes article:http://www.forbes.com/2009/10/09/matt-dercole-cmo-network-digitas.html
Break Media Report:http://www.businesswire.com/news/home/20101216005445/en/Break-Media-Releases-2011-Video-Advertising-Study

Advantages and Disadvantages of Advertising on YouTube.

  In this blog, we are going to discuss the advantages and disadvantages of advertising on YouTube. YouTube offers five different types of advertisement for business' to choose from: Video ads, reach ads (ex. homepage), display ads (on during entire video), brand channel (your own YouTube page) and mobile ads. They also allow you to customize using those five choices. According to YouTube, 400 million videos are watched every day. That's a huge market for advertisers to tap into. However, advertising with YouTube has many advantages and disadvantages that we are going to explore further.

   We will start with the advantages. Advertisers or everyday people can partner with YouTube and create a channel. They will pay a certain sum upfront for the partnership with YouTube but then are eligible to receive revenue from people clicking the ad/page and/or liking the ad/page. Also, after watching a video, YouTube suggest what other videos the viewer may like. As an advertiser you can benefit from this by selecting a target audience for the advertisement. The suggestions are based off preference so your ad can appear in multiple videos alongside of the initial video viewed. Advertisements can appear within the actual videos, before the videos, and in the background of the video, so there is a good chance the ad will be seen and more likely a chance that it will be clicked on. Finally, if you are a small company and do not have the money for the partnership, just make a creative and funny video and let it go viral. If done correctly, this will gather a lot more attention then just having a small ad on the side.

   Now for the disadvantages. Viewers are sometimes forced to watch a certain ad before they can watch the YouTube video. This appears to be an advantage to the advertiser but in fact it can work against them as well. If a viewer is consistently being forced to watch a certain ad every time they click a video, it will make them disgruntled and create a bad image for the advertiser. Also, some video channels allow you to skip the ad completely and other times they cannot which can irritate the viewer. We, as viewers, will skip the videos with advertisement if we can find a comparable video without. As with the videos prior to the ad, the ads on the side of the computer screen or below the video can also become distracting and annoying to the viewer. Since the videos and advertisements are based off preference there is no variety with the advertising on YouTube. No matter what video you are watching, the same ad will pop up over and over again.

Advantages:
- Videos with like and people more likely to receive money with every other click.
- At the end of every YouTube video there are suggestions as to what other videos you may like.
- Advertisements appear within actual videos and around the background so as an advertiser, there is a good chance your ad will be seen and more likely a chance that it will be clicked on.

Disadvantages:
- Sometimes you are forced to watch a certain ad before you can actually watch your YouTube video.
- The ads on the side of the computer screen can be distracting and annoying.
- Sometimes you are able to skip the ad completely, but every other time you cannot.
- There is no variety with advertising on YouTube. No matter what video you are watching, the same ad will pop up over and over again.
- If I as a consumer see that this video has an add with it, I will click out of it and just go watch another video without any ads. From an advertisers perspective, this is a disadvantage.

The Impact of Online Adversiting on the Value Chain- Our Perspective

When it comes to advertising online, there are many people that come together to form an online ad. In this blog we are going to discuss the online advertising value chain and how the different participants are involved in the process. We also want to discuss how the ad itself reaches the end user

Online advertising has changed the way the advertising value chain was created. It is still the same concepts, as you can see in IBM's image above, but the channels have shifted directions and outlets. The online advertising chain is composed of 6 sequences. We are going to focus those six sequences on three roles: the advertiser, content producer and consumer and how those work/ evolved.

(from IBM Institute)

You start with the advertiser who has taken a major role in online advertising. Then you go to the creative advertising agency, which use to follow traditional direct marketing tactics, but since 2007, has shifted to more interactive planning for both the advertiser and the consumer. Creative Advertising Agency and Media Planning is the next step but, over the years it has combined roles with the advertising agency. By doing this, the advertiser plans out how and where they are going to advertise their product to the consumer and what they are going to do to make their product stand out. The most popular strategies that the advertiser can use are Link exchanges, Newsletter advertising and Budgeted advertising. The first strategy is very useful for the starting businesses with the limited budget. It does not boost the company growth, but helps to find other merchants, trade links with them, keep track site traffic. Newsletter ad strategy is the best way to target the specific group of customers, but it also can be expensive. The last strategy is probably the most suitable and profitable for small business because it allows planning and controlling the budget, to foresee the best ways as well as the limits for the successful Ad campaign.

The next role is content owner/producer, which still plays a major role in the adverting chain and will most likely remain the same for future advertising. Within the producing role is the media aggregator/distributer, which is how the advertisement gets distributed. Broadcasters have remained the same but the traditional distributors, such as telco, have taken a step back since 2007 and the internet/ mobile phone seems to have taken its place. Online advertising has opened the doors to so many different outlets and will consistently dominate others in terms of outlets.

Finally the consumer is the last part of the online advertising chain. This has not changed over the years, however, it has taken on a more pressing role since 2007. Online advertisements have not only been opened up to a much larger audience, but have also been selective and targeted for directly to the consumers ( see Facebook blog). This creates a whole new role for the consumer in the world of online advertising.

So, what does this all say- the three major roles in online advertisement is the advertiser, content producers and consumer. All the other parts are taking on more of a support system role for those three roles.

Facebook: The best advertising choice?

Within the realm of social media Facebook has taken its position as leader of the pack. It is safe to say that the majority of the United States either has a Facebook or uses Facebook to track others without obtaining membership to the site. Companies are well aware of this and are willing to pay to have their name advertised across multiple Facebook pages.

However, you will not be seeing the same advertisements on each page of Facebook. Space for company advertisements would be severely limited if the same advertisements appeared on each unique Facebook page. Facebook can generate more revenue by allowing the maximum amount of people to advertise on their website. How is it decided what advertisement will be on which page though? One unique aspect of Facebook is the use of a “Like” button that allows the user to supply their opinions on people’s comments, companies, or even politics. This “Like” button also gives the system some background about the user and their interests. This tool is then used by Facebook to place corresponding advertisements that would best suit the interests of the user. This method of advertising allows the maximum number of advertisers and advertisements to steadily increase as new Facebook pages are created each day.

For instance, you may be an avid fan of the Carolina Panthers. You could pull up the team’s Facebook page and hit the corresponding “Like” button. Now all of your friends will be able to see that you are a Panthers fan and they may “like” you just a little bit more. , then while you are cruising around the website you will see advertisements wanting you to buy Panthers jerseys or tickets. It works with many other things as well such as music, clothing, and your location. This is an extremely helpful new way to advertise online because you already know your target market and can show them your product.

From a business perspective, advertising through Facebook appears to be the most cost effective way to advertise. Facebook offers a variety of payment plans as well as a lifetime and daily budget. Facebook offers two strategies- the cost per click (cpc) and the cost per one thousand impressions (cpm). The CPC is currently going for $.01 and the CPM is going for $.02. We are not sure of any other advertisement outlet going for pennies- please correct us if we are wrong. They also allow you to set up a maximum for each strategy and will not bill you past the maximum that you set, which is great because you have no control over how many clicks or impressions you will receive. For each campaign you will set either a daily budget or a lifetime (of campaign) budget and Facebook's system will essentially take care of the rest.

There are even companies that have thrived by being an advertising intermediary between companies and Facebook. One of the most popular of these companies is TBG Digital. Check out their website here and see what they are all about. They might be the right choice for your growing business: 
http://www.tbgdigital.com/

Contrary to the many advantages of using Facebook, the disadvantages are mirrored through the Facebook users. Facebook creates a digital dashboard for these previously discussed advertisements. For the campaign, Facebook tracks every single user click. Facebook keeps notes on who has clicked, percentages related to clicks, target audiences of the advertisements, and everything in between. This creates a complete marketing analysis for both Facebook and the company paying for the advertisement. Although this is great for the business owner, it can also eliminate an entire marketing team. Advertising on Facebook could be viewed as a disruptive technology. With everyone moving to the digital age, this method of advertising could essentially take the place of traditional marketing. A true reliance on technology in the marketing field will soon be realized. 
So, what do you think? Will Facebook’s online advertising technology change the way business’ conduct advertising completely?

Introduction

 An Introduction to Online Advertising

In this blog we will introduce the various aspects of online advertising. We chose online advertising because it has a big impact on the business world and the IT world. It is very apparent that IT networking and businesses go hand in hand these days.

Some of the topics we are going to cover are advertising in social media, trends in online advertising, along with the multiple shortcomings of online advertising.

Most people have some form of connection to their friends or family through social media, such as Facebook or Twitter, and it seems that advertising through these networking sites is rampant. It is impossible to visit anyone’s Facebook page without noticing the online ads on the right hand side of the screen. However, these ads do seem to be relevant to the user’s interests.   

Another aspect of online advertising that we are going to discuss is trends in the business community with advertising, such as privacy controls and heavy advertising.

 Although there are many advantages to businesses switching to online advertising, there are multiple disadvantages that seem to get the most attention; due to their annoyance to the general public. As college students we experience these aggravating disadvantages on a daily basis. We get on Hulu or Youtube to catch up on a television show or we pull up Pandora internet radio to set the mood for our studying. We can’t even catch up on the news without being overwhelmed by advertisements. We are literally forced to watch these ads. You will see more ranting on this matter in a later blog so we will ease up for now. Throughout the next few weeks, we are going to look into these techniques and discuss how effective they truly are.