Online advertising
Online advertising, also known as online marketing, Internet advertising, digital advertising or web advertising, is a form of marketing and advertising that uses the Internet to promote products and services to audiences and platform users.[1] Online advertising includes email marketing, search engine marketing (SEM), social media marketing, many types of display advertising (including web banner advertising), and mobile advertising. Advertisements are increasingly being delivered via automated software systems operating across multiple websites, media services and platforms, known as programmatic advertising.[2]
Like other advertising media, online advertising frequently involves a publisher, who integrates advertisements into its online content, and an advertiser, who provides the advertisements to be displayed on the publisher's content. Other potential participants include advertising agencies that help generate and place the ad copy, an ad server which technologically delivers the ad and tracks statistics, and advertising affiliates who do independent promotional work for the advertiser.
In 2016, Internet advertising revenues in the United States surpassed those of cable television and broadcast television.[3]: 14 In 2017, Internet advertising revenues in the United States totaled $83.0 billion, a 14% increase over the $72.50 billion in revenues in 2016.[4] And research estimates for 2019's online advertising spend put it at $125.2 billion in the United States, some $54.8 billion higher than the spend on television ($70.4 billion).[5]
Many common online advertising practices are controversial and, as a result, have become increasingly subject to regulation. Many internet users also find online advertising disruptive[6] and have increasingly turned to ad blocking for a variety of reasons. Online ad revenues also may not adequately replace other publishers' revenue streams. Declining ad revenue has led some publishers to place their content behind paywalls.[7]
Benefits of online advertising
The low costs of electronic communication reduce the cost of displaying online advertisements compared to offline ads. Online advertising, and in particular social media, provides a low-cost means for advertisers to engage with large established communities.[64] Advertising online offers better returns than in other media.[75]: 1
Online advertisers can collect data on their ads' effectiveness, such as the size of the potential audience or actual audience response,[25]: 119 how a visitor reached their advertisement, whether the advertisement resulted in a sale, and whether an ad actually loaded within a visitor's view.[71][72]: 59 This helps online advertisers improve their ad campaigns over time.
Advertisers have a wide variety of ways of presenting their promotional messages, including the ability to convey images, video, audio, and links. Unlike many offline ads, online ads also can be interactive.[24] For example, some ads let users input queries[82] or let users follow the advertiser on social media.[83] Online ads can even incorporate games.[84]
Publishers can offer advertisers the ability to reach customizable and narrow market segments for targeted advertising. Online advertising may use geo-targeting to display relevant advertisements to the user's geography. Advertisers can customize each individual ad to a particular user based on the user's previous preferences.[50] Advertisers can also track whether a visitor has already seen a particular ad in order to reduce unwanted repetitious exposures and provide adequate time gaps between exposures.[85]
Online advertising can reach nearly every global market, and online advertising influences offline sales.[86][87][88]
Once ad design is complete, online ads can be deployed very quickly. The delivery of online ads does not need to be linked to the publisher's publication schedule. Furthermore, online advertisers can modify or replace ad copy more rapidly than their offline counterparts.[89]
Concerns
Security concerns
According to a US Senate investigation in 2014, there are security and privacy concerns for users due to the infrastructure of online advertising.[90] This is because of the potential for malware to be disseminated through online advertisements and for such malvertising to be inserted and triggered without sufficient protection or screening. Ransomware gangs were spotted using carefully targeted Google search advertising to redirect victims to pages dropping malware.[91]
Disinformation and dark money
Research published on New Media & Society shows that several actors abuse the obscurity and complexity of programmatic advertising to spread disinformation online,[92] for example by directing advertising money to fund fake news websites.[93][94] Additionally, the lack of regulation and accountability in the digital advertising ecosystem has led to the influx of dark money campaigns that fund political campaigns without disclosing the source of the funds.[95]
Viewability limitations
Eye-tracking studies have shown that Internet users often ignore web page zones likely to contain display ads (sometimes called "banner blindness"), and this problem is worse online than in offline media.[96] On the other hand, studies suggest that even those ads "ignored" by the users may influence the user subconsciously.[97]
Ad Fraud
There are numerous ways that advertisers can be overcharged for their advertising. For example, click fraud occurs when a publisher or third parties click (manually or through automated means) on a CPC ad with no legitimate buying intent.[98] For example, click fraud can occur when a competitor clicks on ads to deplete its rival's advertising budget, or when publishers attempt to manufacture revenue.[98]
Click fraud is especially associated with pornography sites. In 2011, certain scamming porn websites launched dozens of hidden pages on each visitor's computer, forcing the visitor's computer to click on hundreds of paid links without the visitor's knowledge.[99]
As with offline publications, online impression fraud can occur when publishers overstate the number of ad impressions they have delivered to their advertisers. To combat impression fraud, several publishing and advertising industry associations are developing ways to count online impressions credibly.[100][101]
Heterogeneous clients
Because users have different operating systems, web browsers[102] and computer hardware (including mobile devices and different screen sizes), online ads may appear to users differently from how the advertiser intended, or the ads may not display properly at all. A 2012 comScore study revealed that, on average, 31% of ads were not "in-view" when rendered, meaning they never had an opportunity to be seen.[103] Rich media ads create even greater compatibility problems, as some developers may use competing (and exclusive) software to render the ads (see e.g. Comparison of HTML 5 and Flash).
Furthermore, advertisers may encounter legal problems if legally required information does not actually display to users, even if that failure is due to technological heterogeneity.[104]: i In the United States, the FTC has released a set of guidelines indicating that it's the advertisers' responsibility to ensure the ads display any required disclosures or disclaimers, irrespective of the users' technology.[104]: 4–8