Online advertising is a type of marketing and advertising which uses the internet to deliever promotional marketing messages to consumers. Many consumers find online advertising disruptive and have increasingly turned to ad blocking for a variety of reasons.
Online advertising includes email marketing, search engine marketing(SEM), social media marketing(SMM) and mobile advertising. Like any 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 who help generate and place the ad copy, an ad server which technogically delievers the ad and tracks stastics, and advertising affiliates who do independent promotional work for the advertiser.
In early days of the internet, online advertising was mostly prohibited. For example two of the predecessor networks to the internet, ARPANET and NSFNet, had “acceptable use policies that banned network use for commercial activities for profit institutions”.The NSFNet began phasing out its commercial use ban in 1991.
The first widely publicized example of online advertising was conducted via electronic mail. On 3 May 1978, a marketer from DEC(Digital Equipment Corporation), Gary Theurk sent an email to most of the ARPANET’s American west coast users, advertising an open house for a new model of a DEC computer. Despite the prevailing acceptable use policies electronic mail marketing rapidly expanded and eventually became known as “Spam”.
Online banner advertising began in the early 1990s as page owners sought additional revenue streams to support their content. Commercial online service prodigy displayed banners at the bottom of the screen to promote Sears products. The first clickable web ad was sold by Global Network Navigator in 1993 to a Silicon Valley law firm. In 1994 web banner advertising became mainstream when Hotwired, the online component of Wired Magazine and Time Warner’s Pathfinder(website) sold banner ads to AT&T and other companies. The first AT&T ad on Hotwired had a 44% click through rate, and instead of directing clickers to AT&T website, the ad linked to an online tour of seven of the world’s most acclaimed art museums.
GoTo.com(renamed Overture in 2001 and aquired by Yahoo in 2003) created the first search advertising keyword auction in 1998. Google launched its “Adwords”(now renamed Google Ads) search advertising program in 2000 and introduced quality-based ranking allocation in 2002, which sorts search advertisements by a combination of bid price and searchers likeliness to click on the ads.
More recently, companies have sought to merge their advertising messages into editorial content or valuable services. Examples include Red Bull’s House streaming, Felix Baumgartner’s jump from space online, Coca-Cola’s online magazines, and Nike’s free applications for performance tracking. Advertisers are also embracing social media and mobile advertising; mobile ad spending has grown 90% each year from 2010 to 2013.
According to Ad Age Datacenter analysis, in 2017 over half of agency revenue from digital work.