With total advertising spend at a decline, online advertising is the only medium with projected growth in 2010 – to a whopping $60 billion in revenue. So what does this mean for you? Whether you’re a small business or work for a large corporation, you will likely need to know the basics of online marketing – now or in the near future. Online marketing comes in many forms, with the primary being Display, Affiliate, Search (paid and organic), E-mail, and Social Media. For this article’s discussion, I will focus on the who, what, where, when, how, and why of Online Display advertising.

WHO are we advertising to:

Online marketing, more so than other advertising channels, gives the ability to target your audience efficiently and effectively. There are a variety of ways to target potential customers including by demographic, behavior, or context. That could be a browsers age, gender, household income, geographic location, last site visited, current page, etc. After a company has determined who its target market is, it’s likely you can appeal straight to those consumers – for a price. Remember that most targeting comes with an incremental cost.

WHAT are we advertising:

It’s all about offer and creative. With users getting overwhelmed with banners on nearly every page they visit, you need to make your creative stand out. If you’re a direct response advertiser, your goal is for a user to respond in a specific way – whether it’s to visit your web page, fill out a survey, or make a purchase. This means that your creative assets should include a strong call to action (Order Now!) showing the user the action you want them to take. Direct response advertisers are typically ROI driven – they’re trying to get some dollar value for the amount they’re investing. If you’re a brand advertiser, you’re likely trying to grow market awareness for your brand. This could mean that you might not want a user to take action at that moment, but to think of you at a later date when they may want your product or service offering. For this type of creative, your brand should be prominent with a clear, consistent message that a user is likely to remember. Utilizing GIF, JPEG, and PNG images, flash, rich media, video, radio, and text links, you can make an impact on the audience you’re trying to hit. There are 3 standard IAB sizes (Interactive Advertising Bureau) that are used most frequently for advertising on the internet: 300×250 pixels, 160×600, and 728×90. You also might hear them referred to as medium rectangle, wide skyscraper, and leaderboard.

WHERE are we advertising:

There are a variety of ways to go about media buying. Part of where you want to advertise is based on who your target audience is, and part is how much you can afford to pay. There are a multitude of deal structures including CPM (cost per thousand impressions/number of times banner is shown), CPA/CPO (cost per action/acquisition/order), CPC/PPC (cost per click/pay per click), CPL (cost per lead), rev share (percent share of revenue with partner), and flat (fixed fee determined upfront). You can run on a network, such as Yahoo or AOL, to get mass reach and large volume. Networks work by buying inventory from a variety of publishers in bulk and selling it to advertisers at low rates. Alternatively, you can buy directly on a site like Amazon, eBay, or even YoungEntrepreneur, and here you can specify the type of placement you want to run. Run of site and run of network (ROS/RON) typically are less expensive but may not be reaching your target audience most effectively. Ever wonder why you visit a site and then see their ads all over the web for weeks after; particularly customized with a product or service you had looked at? That’s known as retargeting, and is used to bring potential customers back by following them on the web.

WHEN are we advertising:

Maybe your company or the company you work for just launched the latest and greatest product. Perhaps you have a great deal going on like 50% off plus free shipping. Or possibly you just want to grow your business and get your name and offerings out there. Online advertising can be done at any time, with almost any budget. While many sites have minimum buy requirements, you can get started with Google AdWords for a few hundred dollars and pennies per click. People are surfing the web 24 hours a day, allowing you to always be reaching someone. Now depending on how targeted your audience is, you might want to show your ads at a certain time of day (known as day parting) or on a certain day of the week, but other than that – the when is really limitless.

HOW are we advertising:

After buying the media, you’ll have to come up with the assets to provide to the publisher or network. For most, this will include a piece of creative and a link to track that creative. For smaller companies, they may have an internal system to create unique tracking links. For larger companies, they might use what is known as an ad server. Examples of ad servers include Google’s DoubleClick or Microsoft Atlas. The purpose of an ad server is exactly what it seems: to serve your ad. Rather than having the publisher host the ad on their site and through their server, the ad is hosted on the ad server you partner with, and you provide code to the publisher you are working with. The extra benefits include additional tracking data on your end, like seeing the number of times the banner has served or how many people have clicked on it. Additionally you can track the user to see click-through orders and view-through orders. Click-through orders are when a user sees a banner, clicks on it, and makes a purchase. A view-through order is when a user sees a banner, and then comes in through another means; for example – an e-mail, searching on Google, or another banner on the web. Some of those orders can still be attributed back to the original banner through what is known as attribution.

This is, of course, a very high-level overview of the basics of online advertising, but should you have further interests, please feel free to leave a comment or reach out to me directly. It really is a fascinating space that we are just beginning to uncover. The first clickable banner ad was shown in 1993, and 2 decades later, we are still exploring the unique possibilities found on the World Wide Web. I look forward to hearing from you, and hope this brief summary has piqued your interest to learn more.

As written for YoungEntrepreneur, August 31, 2010