Simply put, online advertising is advertising on the Internet. Online advertising encompasses adverts on search engine results pages (covered in this article on PPC advertising), adverts placed in emails and other ways in which advertisers use the Internet. However, this chapter focuses on display advertising or rich media advertising. Whether online or off, the main objective of advertising is to increase sales. As well as this, advertising aims to increase brand awareness. Advertising is based on the simple economics of supply and demand. Advertisers aim to stimulate a consumer need and then satisfy that need.

One of the greatest benefits of online display advertising is that the messages are not restricted by geography or time. Online advertisements are also much more interactive than offline advertising. While both online and offline advertising can be disruptive, interactive online advertising can be designed to be perceived as less so.

Online display advertising began as simple hyperlinked images shown on a web site and has since progressed to include video, sound and many other modern technologies. Today, messages and interactions can be contained within the advertising display, without ever taking consumers to a landing page.

Although the Internet provides new scope for creative approaches to advertising, we see its true advantage when we realise how trackable, and therefore measurable, Internet advertising is. Or, to take it from Eric Schmidt, CEO of Google cited by Lieb (2002): "The Internet will transform advertising because of its trackability, not its beauty."

Online advertising rapidly followed the developing Internet. And, as consumers are increasingly spending more time online, and hours spent on the Internet start to eclipse hours spent watching TV, the medium becomes increasingly important to any advertiser. According to Wikipedia, the first clickable banner advert was sold to a law firm in 1993 by Global Network Navigator. HotWired, an early web magazine, was the first to sell

advertising space in large quantities to a number of advertisers. One of the very first advertisers was AT&T (a US telecoms company), which went online in October 1994.

This was part of a campaign that AT&T was running to promote the Internet to consumers, and included television and outdoor advertising. Believe it or not, but this was cutting edge back in '94! As web technology has developed, so has the technology that is used to create and serve advertising online.

Ad Space The allotted space on web pages available for online advertising.

Animated GIF A GIF which supports animations and allows a separate palette of 256 colours for each frame. See GIF.

Banner An online advertisement in the form of a graphic image that appears on a web page.

Banner Exchange A symbiotic advertising initiative whereby businesses involved promote each other's services and web sites on an exchange rather than paid basis. Also known as link exchange.

Call To Action A phrase written to motivate the reader to take action. (sign up for our newsletter, book car hire today etc.).

Click Through A click on a link that leads to another web site.

Click Tracking Using scripts to track clicks into and out of a web site. Can also be used to shield a link from being picked up as a back link to another site.

Click-through Rate The number and percentage of recipients who clicked on a particular URL included in an email, a web page etc.

Cookie A small text file that is stored on an end-user's computer that allow web sites to identify the user, and allow the web site owner to construct a profile of that user.

CPA Cost Per Action. Refers to the cost of acquiring a new customer. The advertiser only pays when a desired action is achieved (sometimes called cost per acquisition).

CPC Cost Per Click. Refers to when an advertiser only pays when their ad is clicked upon, giving them a visitor to their site - typically from a search engine in Pay Per Click search marketing.

CPM Cost Per Mille. Refers to Cost per 1000 ad impressions. An advertiser pays each time 1000 impressions of their ad are shown.

GIF Abbreviation of Graphics Interchange Format, a GIF is an 8-bit-per-pixel bitmap image format using a palette of up to 256 distinct colours. GIFs allow images to be compressed for faster display time.

Impression Fraud The act of deliberately generating impressions of an advert without the intention of clicking on the advert. The result is a reduction in click through rate which can affect Quality Score in PPC advertising and the ROI of a banner campaign.

Impressions The number of times a web page or ad is viewed.

IP Address Used to uniquely identify a computer and/or system on the Internet.

Landing Page The page a user reaches when clicking on a paid or organic search engine listing. The pages that have the most success are those that match up as closely as possible with the users search query.

Popup Unrequested window that opens on top of the currently viewed window.

ROI Short for return on investment.

Traffic This refers to the visitors that visit a web site.

Advertising, whether online or offline, has a number of objectives:

a)Building brand awareness

b)Creating consumer demand

c)Informing consumers of the advertiser's ability to satisfy that demand

d)Driving response and sales

e)building brand awareness

Making people aware of a brand or product is an important long-term goal for any marketer. Once customers know about the brand, the marketer has taken the first step towards gaining the customer's trust and patronage. The better known a brand is the more business they can do. And the ultimate goal is to do more business and sell more of the product. Online, creative advertising or banner advertising is largely visual, making it an ideal channel for promoting brand collateral. creating consumer demand

Consumers can't want what they don't know about. Advertising needs to convince consumers about what they should want and why they should want it. Modern online advertising provides a great way to communicate the USPs (unique selling points) of a product, thereby helping stimulate demand. satisfying consumer demand Once the consumer is aware of and desires a product, they need to find out how to satisfy that desire. If brand building has been effective, they will know that a particular brand exists. At this point, it is important for the marketer to show the consumer how their particular brand or product will best meet that need. driving response and sales All forms of online marketing need to drive traffic and sales in the long term. However, the immediacy of online advertising also drives traffic and sales in the short and medium terms. Unlike traditional media advertising, online advertising can turn the potential customer into an actual customer right there and then. What's more,

it is possible to measure accurately how effectively the online advertising campaign does this.

the key differentiator

Online advertising is able to drive instant sales and conversions. Unlike offline advertising mediums, the consumer can go from advert to merchant in one easy click. Because of the connected nature of the Internet, online activities are highly trackable and measurable, which makes it possible to target adverts and to accurately track and gauge the effectiveness of the advertising. Each display advert can be tracked

for success.