Advertising on the Internet

Advertising on the Internet is the practice of promoting products or services using various online channels. It is a cost-effective way for businesses to reach a targeted audience, increase brand awareness, and drive sales.

The audience is spoilt for choice on the web. As users explore and discover their unique personal tastes amidst the enormous glut of webpages, media consumption on the net is shattered into numerous miniscule fragments.

Broadly speaking there are two approaches to marketing online – inbound marketing, which relies on a “pull” strategy, involves creating content that attracts potential customers to a business’s website or social media channels, and outbound marketing or advertising, which is also referred to as “push” advertising, involves delivering targeted ads to potential customers through various channels, such as search engines, social media platforms, and display networks.

Both inbound and outbound marketing have their strengths and weaknesses. Inbound marketing can be more cost-effective over the long term, as it can generate organic traffic to a business’s website. However, it can take time to see results, and there is no guarantee that the content will resonate with the intended audience.

Outbound advertising, on the other hand, can generate immediate results and provide more precise targeting capabilities. However, it can be more expensive and less effective in building long-term relationships with customers.

In general, a balanced approach to online advertising that leverages both inbound and outbound strategies can be the most effective way to reach and engage potential customers on the internet.

As it grows to contribute to a larger component of a brand’s communication mix, it is increasingly important that online marketing is well integrated with offline marketing. All marketing initiatives must be tightly interwoven to create a synergistic impact.

Outbound Advertising

The goal of outbound advertising is to put a business’s message in front of potential customers and encourage them to take action, such as clicking through to the business’s website or making a purchase.

Common types of outbound online advertising include display ads, search engine marketing (SEM), social media advertising, native advertising, video advertising, and email marketing. Display ads are banner ads that are placed on websites, while SEM involves bidding on keywords to appear at the top of search engine results. Social media advertising involves promoting content on social media platforms such as Facebook, Instagram, and Twitter. Native advertising involves promoting content that appears as if it were part of the platform’s regular content. Video advertising involves creating and sharing video content to promote products or services. Email marketing involves sending promotional emails to customers or potential customers.

The internet can provide unparalleled visibility. Facebook, for instance, collects information about users’ interests, and their online activities and social connections. This data is subject to Facebook’s privacy policy and is used for targeted advertising. Similarly, Twitter collects data about users’ followers and interests, while Google collects data about users’ search history.

LinkedIn collects data about users’ work experiences and connections, while operating system makers collect data about the apps users download on their phone, and online retailers collect data about users’ purchases and credit card information.

It is important to note that this extensive visibility raises privacy concerns. Individuals can take steps to protect their privacy, such as adjusting their privacy settings on social media platforms, using ad-blockers, and being cautious about sharing personal information online.

Regardless of the privacy concerns, the visibility provided by the internet is an extraordinary advantage for businesses looking to reach finely-targeted audiences. Online advertising allows businesses to use this visibility to reach specific audiences based on demographics, interests, behaviours, and other factors (refer to section Targeting), which make it more efficient and cost-effective than conventional advertising methods.

Online publishers have the ability to segment their users into various audience segments or personas based on their online behaviours, demographics, social graphics, locations, and other factors. Ad servers can then direct different advertisements to different browsers, allowing advertisers to target their ads based on their audience characteristics, to individuals who are most likely to be interested in their products or services.

This increases the effectiveness of ads while being less intrusive because the ads align with the audience’s interests. It is likely to result in higher click-through rates, conversions, and return on investment (ROI). In contrast, traditional advertising methods such as TV or print ads may reach a larger audience but are less targeted and therefore less likely to convert.

By leveraging the visibility and targeting capabilities of the internet, businesses can create highly effective advertising campaigns that reach the right people at the right time, ultimately driving sales and revenue.

In addition to better targeting capabilities, internet advertising provides superior analytics, reporting, and business intelligence. The use of real data, available in real-time (as opposed to projections), and the ability to leverage real identities based on users’ shared inputs (e.g., social network data) allows for more accurate analysis of campaign performance and greater insights into target audiences.

Moreover, internet advertising has the ability to learn and adapt to audience behaviour, supporting responsive or dynamic creatives. This means that ads can be optimized in real-time based on audience engagement, improving the relevance and effectiveness of campaigns.

This advanced analytics and adaptive functionality give businesses the ability to measure and adjust campaign strategies in real-time, allowing them to achieve better results and maximize ROI. By leveraging the power of internet advertising, businesses can gain valuable insights into their target audiences and improve the effectiveness of their advertising efforts.

Another benefit for advertisers is high level of flexibility and control on the reach and exposure of advertisements on the internet. This allows for better budget controls through a variety of pricing models based on impressions and clicks. It makes advertising on the web conducive both for niche brands as well as mass marketers.

While outbound advertising can be effective, there are also some challenges associated with it. One of the main challenges is ad fraud, which refers to fraudulent or illegitimate activities that artificially inflate ad engagement metrics or click-through rates. This can lead to wasted advertising spend and inaccurate reporting of campaign performance.

Fake impressions or fake traffic can also be a problem, as many advertising “clicks” are generated by bots or automated algorithms. This can lead to businesses paying for clicks that have no real value or impact on their bottom line.

Another challenge is ad-blocking, which is the use of software or browser extensions to prevent ads from appearing on websites. This can make it difficult for businesses to reach their target audience and generate leads or sales.

Privacy concerns are also a significant issue with outbound advertising, as businesses may collect and use personal data to target ads to individuals without their consent. This can lead to a lack of trust and backlash from customers, which can harm a business’s reputation.

Moreover, a lack of transparency in the digital advertising ecosystem can also create brand safety concerns. With automation, ads are placed at scale and speed, making it difficult for brands to know exactly where their campaigns are appearing. This can result in ads being placed on inappropriate or harmful content, which can damage a brand’s image and the business’s reputation.

Exhibit 19.14   Brand safety concerns – KFC advertisement appears on a webpage that talks about foods that are bad for health.

An example of brand safety concern is when a KFC advertisement (refer to Exhibit 19.14) appears on a webpage that talks about foods that are bad for health. This can harm the brand image as the adjacencies, i.e., content surrounding the advertisement, can impact how consumers perceive the brand.

To mitigate these challenges, businesses can employ contextual/ semantic targeting of advertising, which reduces the risk of ads appearing alongside inappropriate content. Additionally, businesses can work with reputable advertising platforms and partners that prioritize transparency, brand safety, and fraud prevention measures.

Overall, internet advertising offers many benefits to businesses but also requires careful planning and execution to be effective.

Inbound Advertising

Inbound marketing generates traffic through content that attracts potential customers to a business’s website or social media channels. The content can take many forms, such as blog posts, social media updates, infographics, and videos. It is a “pull” strategy where the goal is to provide valuable content that engages potential customers and draws them to a business’s website, where they can learn more about the business and its offerings. For a detailed understanding refer to Section What Works Online — How to Get Discovered, and the case examples pertaining to Chobani, Garnier and Always.

Inbound marketing can be more cost-effective over the long term, as it can generate organic traffic to a business’s website. However, it can take time to see results, and there is no guarantee that the content will resonate with the intended audience.

Inbound marketing can take the form of viral advertising, for instance, video campaigns on YouTube, where ads are placed on owned media to create a buzz and channel traffic to the brand’s websites. It is, however, difficult to create online advertising that will reach out to the masses. Although some advertisements have achieved millions of views, going viral is a challenging feat for most advertisers.

Viral Advertising — Challenge of Reaching the Masses

Exhibit 19.15   Dove’s “Real Beauty Sketches”.

The Old Spice commercial of 2010, “Smell like a man, man”, the fastest growing online viral video campaign in its time, received 6.7 million views on Day 1 and 23 million by Day 3. On the net it has the benefit of remaining on the backlist and its views reached 60 million by 2022. Some other notable successes include Blendtec’s “Will it Blend?”, Evian’s “Baby & Me” and Dove’s “Real Beauty Sketches” (Exhibit 19.15).

These are relatively rare examples of ads that went viral. The vast majority of online advertising has an insignificant reach or impact.

Advertising campaigns that people choose to view on their own free will, compete for attention with the glut of content that already exists on the web, as well as the fresh content that continually pours in. To succeed, they must entertain or inform in a way that resonates with the audience, while effectively conveying the intended brand message. Even then, the challenge remains to be discovered and generate buzz among consumers.

It is a tall order. There can be no doubt that to reach out to mass audiences, it is much easier for advertisers to ride on the entertainment industry than to compete with it.

Global FMCG brands that need to reach out to the masses are unlikely to achieve their target purely through inbound marketing. Even if a campaign goes viral, it may not have the impact that mega brands need to quickly reach out to hundreds of millions of consumers. A multi-pronged strategy that includes both inbound and outbound advertising would be more effective in reaching out to a broader audience.

Despite the ills of outbound marketing, or interrupt advertising as is disparagingly referred to, it is the more effective solution for marketers who need to target mass audiences, and it presents a win-win. Mega brands benefit from the reach, and the entertainment industry benefits from advertising revenue. From the consumers’ perspective, while ads interrupt their viewing experience, they do fund the entertainment industry, which otherwise would need to rely more on subscription fees to pay for content.

TV Remains Most Effective Medium for Mass Marketers

Despite the increasing popularity of online content, TV remains the most effective medium for mass marketers. Statistics show that major TV broadcasts, such as the Super Bowl, the Cricket World Cup, and the Olympics, attract billions of viewers worldwide. Even primetime viewership remains high, with Nielsen ratings indicating that millions of people continue to tune in to television on a regular basis.

For reaching a mass audience, concentrated within a geographical boundary, television still offers the most efficient and effective means. By placing ads on multiple channels and programs, advertisers can reach a large audience quickly on TV.

However, with the rise of the internet and the growth of online content, the influence of digital media cannot be ignored. Online advertising spend has surpassed TV, and digital platforms are becoming increasingly important for reaching audiences. For example, the Tokyo 2020 Olympics, the first “streaming games”, was the most-watched Olympic Games ever on digital platforms, with 3.05 billion unique viewers tuning in to coverage across linear TV and digital platforms. In contrast, TV viewership declined, particularly in Europe and the US, where the time zone presented a challenge for broadcasters.

While TV remains a potent force, these comparisons reveal a clear downward trend in its viewership. As download speeds improve and smart TV penetration increases, online content will continue to expand, leading to further erosion of offline media, including linear TV.