Sunday 24 June 2007

Online Marketing

By K.Krishna Chander Reddy

Online Marketing or Internet Marketing first began in the early 1990s as simple, text-based websites that offered product information. Over time Internet marketing evolved into more than just selling information products, there are people now selling advertising space, software programs, business models, and many other products and services. By offering local advertising to small to medium sized businesses, ROI (Return on Investment) has grown while the investment has been lowered. This type of marketing is the backbone of modern capitalism, allowing anyone with an idea,product or service to reach the widest audience possible. The next evolutionary step would be to refine the consumer search to those consumers specifically searching for your product or service, and entice them with catchy tag lines and promotions. Once the consumer has chosen your company, and entered your e-store, the design of your website will determine the online to offline or e-commerce conversion rates. These are what business owners covet, the lowest cost per lead.

Search engine giants such as Google (with Adsense and Adwords), Yahoo! (with Yahoo! Search Marketing) Microsoft (with Microsoft Ad Center) are eying online marketing in a huge way and it has become all the more evident with Google acquiring doubleclick. Now the race is on to tap into the enormous market that is already available.

In my coming posts I will be discussing in detail about the marketing strategies used by Google and Yahoo. Before getting into that it is use full to know a few terms which come up regularly in the context of Internet marketing.

Publishers: Publishers are people who own a website and are interested in making money by serving ads on their websites.

Advertisers: Advertisers are ones who want to advertise their business by displaying ads on various websites.

Impressions: The viewing of a page or viewing an ad or a page is called impression. if suppose a page has been viewed by various customers 100 times, it is said that 100 impressions of the page have occurred.

Conversion: In marketing a conversion occurs when a prospective customer takes the marketer's intended action. i.e if the customer has visited a marketers website and has made an online purchase or signed up with the website, a conversion is said to have occurred.

CPC: Cost Per Click. Publishers are paid for every unique click that delivers a consumer to the advertiser's site. Regardless of what that consumer does on the advertiser's site, the click is still paid. PPC or Pay Per Click is also sometimes used instead of CPC.

CPM: Cost Per Thousand (M stands for the Roman Numeral " M " for thousand). The publisher paid rate is based on units of 1,000 impressions. Rather than an absolute cost, CPM estimates the cost per 1000 views of the ad.

ROI: Return On Investment. Or sometimes just return, is the ratio of money gained or lost on an investment relative to the amount of money invested.

eCPM: Effective Cost Per Thousand. This is calculated by dividing total earnings by total number of impressions in thousands.


CTR: Click-through Rate. This is a way of measuring the success of an online advertising campaign. A CTR is obtained by dividing the number of users who clicked on an ad on a web page by the number of times the ad was delivered (impressions). For example, if your banner ad was delivered 100 times (impressions delivered) and 1 person clicked on it (clicks recorded), then the resulting CTR would be 1%.

CPA: Cost Per Acquisition. One acquisition is registered when a particular action is taken by the consumer on the advertiser's site. The payable action is determined by the advertiser and the pay-out rate is determined by the requirements of the payable action. Examples of payable actions include signing up for a newsletter, playing a game, downloading an applet, or applying for a credit card.



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