Advertising on the internet is still a relatively new concept for companies, small businesses, and individuals. Many people still don’t understand it. They don’t know that the majority of websites that exist are online for a reason – to profit.
Businesses want to know what internet advertising has to offer their company. Individuals want to know how these websites are making money, or even how to make money with a blog, so that they can cash in themselves. It’s all very simple, but again, not something that everyone is familiar with. It needs a bit of explaining.
How Internet Advertising Works
Advertising on the internet works much in the same way as other advertising channels do:
- Radio – Radio stations that you’re listening to are playing your favorite music so that you’ll tune in on your way to work. The more people that tune in, the more money they make. They’re able to sell ads based on the number of people who listen to their station.
- Television – Networks are playing your favorite shows so that you’ll watch their channel. The commercials give networks the money they need to pay for the showings, with plenty of money left over for them to pocket.
- Billboards – If a new local business wants to raise awareness of their brand, a billboard on the side of the highway is a good start. The advertiser of course has to pay the person that owns the space (where the billboard is located).
- Internet – Content websites are made so that they can educate, inform, and entertain you. These websites make money because of the advertisements that they expose you to (banners, paid links, paid reviews, etc.). Next time you do a search on Google, or any other search engine, take a look at the top, and on the side of the results. You’re going to see a lot of sponsored listings. Click on those listings, and the search engines get paid.
- Everywhere – Trucks, labels, banners, and everywhere else you look.
Advertising is all around you. Businesses are building their brand, and making money. You’re being exposed to those brands, and buying from them. Companies that want to sell you something (Pepsi, Microsoft, Kraft, etc.) want to be where you’re at. They want to advertise in the places that you’re paying attention to.
Therefore, an entirely different kind of business opportunity exists. A business that focuses on getting your attention, and entertaining you (TV shows, radio stations, websites). They entertain you, because if they succeed in getting your attention, then they profit from the companies who are trying to sell you something, and therefore willing to advertise.
Advantages of Advertising on the Internet
- Huge Potential – More and more people are forgetting about their televisions, throwing away their magazines, and turning to the internet. As economies grow, and the costs of getting on the internet decrease, the number of people who access the internet will continue to skyrocket.
- Global Reach – Getting your message across to populations from around the world has never been easier. This is especially important to businesses that have a target market that is scattered around in different locations.
- Low Entry-Level Fees – You can begin advertising on the internet with only a few cents.
- Laser Targeted – You can target customers who are searching exact keyword phrases. For example, a dry cleaning business located in Denver could bid through Google on the keyword phrase “dry cleaning in Denver.” It doesn’t get more targeted than that.
- Excellent Tracking – You’re able to monitor how many impressions your ad is getting, and how many people are clicking through to your website.
- Cost Efficient – Since you’re able to target and track yours ads, advertising on the internet is typically a lot cheaper – less money going to waste.
- Easy – It’s usually just a matter of signing up to a network, uploading an ad, and starting your campaign.
Internet Advertising Models
There are a variety of different models that advertisers and publishers can use to cater to their preferences:
Cost Per Click (CPC) – Advertisers only pay when their ad is clicked on.
Cost Per Impression (CPI) – More commonly referred to as CPM (cost per thousand page impressions). Advertisers pay every time that their ad appears on a users screen.
Cost Per Sale (CPS) – An advertiser pays the referrer every time a sale is made.
Cost Per Action (CPA) & Cost Per Lead (CPL) – Advertisers pay when an action is taken or interest is shown (email opt-in, free registration, etc.).
Additional Options – Of course, advertisers can contact specific publishers to work out a customized advertising package. This could include paid reviews, or banner advertisements that run for a month (usually priced with a flat rate).
There you have it – the basics of internet advertising. Now that you know all about advertising on the internet, go build your brand, and start making money online!