Many of my readers will probably find this stuff a bit basic. I've added some good links and a bit of timely commentary. Also, a lot of people don't know this stuff. I am certainly not the expert-ist person on all of this. I've had to explain a lot of this to a handful of prospective clients. So, I thought I'd share. I hope someone else will take it, slice it, dice it and add more info. It'd be nice to wikify some of this shiznit. Update: Apparently, some of this already is wikipedia-d.
Methods of Buying Ads
CPM - Cost per thousand impressions/views. This is the way most high end advertising is purchased. These ads are almost always graphical. They accomplish two things: branding and generating leads. Corante, yahoo, msn, weblogsinc, blogads and the major newspaper sites all sell their advertising this way. Big media agencies that focus on branding campaigns for their customers purchase these ads. Sometimes, publishers will sell this as sponsorship and provide exclusivity to advertiser(s).
CPC - Cost per click. Advertisers only pay when their ad is clicked. This was made popular because of search engine marketing, which is explained below. Obviously, this is a better deal for the advertiser: They only pay when a lead is sent their way. This usually doesn't accomplish much in the way of branding, though, since most often, these ads are text based. And for the people that I've given free reign to place free ads on my blog through blogads, you should have used images. They perform twice as good. (A good link.)
CPA or Affiliate Marketing - Cost per action. Advertisers only pay when a sale is made. This has been around for awhile. Amazon made it big. ValueClick is the big network that handles a lot of this. This is ideal-ideal for advertisers. But, not so good for publishers. IMNSHO, this area is rife for some innovation. The application of contextual matching and more automated ways to place relevant ads on websites, so that low tier publishers can generate income without any work, could be big. I expect IAC, with their new ASK Jeeves acquisition to put some resources behind this as they are one of the biggest commerce engines on the net. Greg Yardley has an awesome post about the pluses and minuses of CPA advertising. (Where did this Greg guy come from? And why does he only have 15 links into his weblog?)
Methods of Targeting the Delivery of Ads
Search Engine Marketing This is the hottness right now. This delivers an ad to a user when they are looking for it. How much better can it get? When a user searches at a search engine, there are ads that are delivered as search results. The big players are google adwords and overture. MSN is rumored to be on the prowl. I started writing this a little while ago. MSN is more than on the prowl. Kanoodle, Quiqo, Findwhat are other players in the space. (A good link.)
Demographic Targeting This was around way before the internet. Advertisers have always delivered ads to the age group, interest groups, hair color, etc that they think want to hear about the product. The internet makes it easier through a bunch of different methods. Watch Tacoda as the leader here.
Contextual Targeting When the advertising technology scans the text on the page and then delivers ads that are relevant to the content. For example: if an article is talking about cars, ads for cars.com and ebay motors are delivered next to it. Google manages the biggest contextually targeted ad network, adsense, which runs ads on lots of publisher sites. Waypath has some cool contextual matching technology. But, I wonder if Martin is still working on it? I haven't heard from him in awhile.
Behavioral Targeting When a profile is built up of an individual and the system learns what the person likes. Then, the system delivers ads based on what the system has learned about the individual. Obviously, monitoring behavior helps fit an individual into demographic groups. However, it could encompass more. This isn't a very developed technique, so it could go in different directions. Lots of talk about how cookie deletion makes this difficult. Of course, the networks like yahoo and msn could take this to a new level without cookies. Looks like MSN may be the first to make this big. Check out claria for more.
Geographical Targeting Do I need to explain this? If you want to do this, you can use the ppc ad networks. Also, call your local newspaper. Outside of the big cities, inventory seems to be fairly UNDER sold. In fact, most local magazines and newspapers don't even bother with running local online ads. And others don't even have their sales people sell it. How stupid is all that? So, if you really want to get local, find some local bloggers.
Vertical Market Segmentation I don't know much about this. Apparently, some ad networks are differentiating themselves by putting together high quality ad inventory that reaches target vertical markets. Smart!
That is enough. What would other people add to this?
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