Advertising-related technologies never stop evolving. They’ve already given us the personal computer, the mobile phone, the Internet, HDTV, 4K TV, digital media players, Blu-ray, IPTV, VOIP, and iPads—and the software to make it all simple enough for anybody to use.
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The founders of Google were obsessed with helping people find information on the Web. That obsession resulted in the founding of one of the world’s biggest tech (and advertising) companies, Google.
© Ben Margot/AP Images
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The primary elements of digital interac- tive media are websites, mobile media, and social media. We deal with each of these in turn in this chapter. Digital me- dia continue to surge in importance as a platform for advertising as well as other communications (see Exhibit 12–1). In recognition of importance to advertising, we need to understand what this option is, how it is organized, how people get to it, and how advertisers buy it and use it in their marketing plans.
The Internet
The Internet is a global network of com- puters that communicate with one an- other through protocols, which are common rules for linking and sharing information. The Internet began in the early 1960s as a result of the Defense Department’s Advanced Re- search Projects Agency (ARPA) plan to create a network that could survive a Cold War attack. ARPAnet had little com- mercial value; its primary users were governmental organiza- tions and research universities, and the Internet of today is a far different medium. However, ARPAnet was important be- cause its structure, a distributed network, was revolution- ary. Traditionally, media content has been delivered through c entralized networks, in which a hub, such as a TV station, a newspaper publisher, or a cable company, distributes Evolving technologies present challenges
to advertisers, who are often unsure how to best take advantage of the opportunities they afford. These opportunities may be- come clear only with time. When mobile phones were first introduced, advertisers thought only in terms of ads on the de- vices’ screens. It turned out that such ads are the tip of the marketing iceberg. For example, a typical teen watching a high school basketball game won’t just use his phone to place a call. He’ll use it to snap a picture of the star player’s Nike shoes, send the photo over Instagram to his dad (“Hey Dad, I have a birthday coming!”), and Snapchat his friends to seek their opin- ions about the shoes. All of this will be ac-
complished in a minute or two. Many of these interactions will take place outside of a web browser via smartphone apps.
While using digital media, the teen will be exposed to several marketing messages, some of which can easily identify his gen- eral location and interests. And he will leave a trail of activities for marketers to ponder.
Digital media are truly revolutionary in their effect on our daily lives, and it’s a revolution for marketers, too. As the nation’s biggest advertisers realized that digital media offer vast oppor- tunities for engaging target audiences, they started increasing their spending dramatically. In light of this change, the Internet research company eMarketer reports
that online ad spending reached nearly
$40 billion in 2012. This is noteworthy because for the first time ever, money spent on digital advertising exceeded the combined totals for newspaper and magazines. And in 2016, spending on digital will exceed the combined totals of all print plus radio and outdoor combined.3
In addition to phenomenal growth, by offering true interactivity, digital media enable businesses and other organiza- tions to develop and nurture relation- ships with their customers and other stakeholders on a global scale at very efficient cost.
Social networking site Facebook allows web users to join networks organized by their school, city, or shared interest. Founded in 2004, the site has surged in popularity, attracting over a billion unique users in 2016.
© Eric Risberg/AP Images
E X H I B I T 1 2 – 1 U.S. digital ad spending by format 2015–2019 ($ billions).
Search Display Classifieds Lead gen E-mail Mobile messaging
0 10 20 30 40 50
2019 2015
Source: “US DIgital Display Ad Spending to Surpass Search Ad Spending in 2016,” www.emarketer.com/Article/
US-Digital-Display-Ad-Spending-Surpass-Search-Ad-Spending-2016/1013442.
Internet A worldwide network of computer systems that facilitates global electronic
communications via e-mail, the Web, ftp, and other data protocols.
protocols Common rules for linking and sharing information.
distributed network Characterized by many different hubs and links, which allows continuous communication even if some connections stop working.
centralized networks How media content was traditionally delivered. A hub, such as a TV station, a newspaper publisher, or a cable company distributes content to many receivers.
The second distinction between traditional and digital media concerns the relationship between those who create content and those who consume it. Traditional media compa- nies are content creators while audiences are content consumers. As an example, NBC develops and schedules a show and, if you enjoy it, you sit down on at the same time and night each week to watch it. NBC is the creator and you are the consumer. But digital media are interactive, blurring the line between content providers and consum- ers. The connected audience doesn’t just consume online content; it interacts with it and helps create it.
The Web
In the early 1980s, the National Science Foundation expanded ARPAnet by support- ing a fast data network that linked informa- tion centers across the United States. At the same time, online content providers such as AOL and CompuServe helped create an Internet audience by providing news, information, and e-mail services to subscribers.
During the 1990s, the number of people using the Internet doubled each year. Fueling the medium’s growth were the in- creasing popularity and affordability of personal computers
and modems, which allowed computers to tap into the Internet via an ordinary phone line. The 1990s was also the decade in which people began going online to ac- cess a particular part of the Internet known as the Web. The Web, as its name implies, was a distributed network of con- tent providers and users, communicating through a protocol known as HTML, or HyperText Markup Language. HTML al- lowed for the relatively easy creation of web pages that can be easily linked to all kinds of content, including other web pages or sites (and, later, photographs, movies, databases, audio files, and such).
Viewing web pages was made easy by the development of web browsers, software that interpreted HTML.
content to many receivers (see Exhibit 12–2). In a centralized system, if the hub is knocked out, receivers are left without information. But a distributed network is one characterized by many different hubs and links, which allows continuous communication even if some connections stop working. And, importantly, no single participant controls content.
There are at least two other important dis- tinctions between the digital interactive and traditional media. The first is the cost of time and/or space. In traditional media, time (on TV or radio) and space (in print) are precious and limited resources. Net- work TV commercials average 30 sec- onds, which is a very small window, and that window is expensive, sometimes costing advertisers hundreds of thousands of dollars. In contrast, space on the Inter- net is vast and inexpensive. Websites can store as much information as a company wishes. For consumers who require lots of facts before they make a decision to buy, this is a real plus. And for small advertisers with limited budgets, the economics are very attractive.
E X H I B I T 1 2 – 2 In a centralized network, a hub distributes content to many receivers. A distributed network has many different hubs and links.
Centralized Network Distributed Network
Following the viral “Ice Bucket Challenge,”
donations to the ALS Association increased from an annual figure of $5 million to
$115 million in the United States alone, and the organization estimates that global contributions surged to more than $200 million.
Source: Facebook
Web Information available on the Internet that can be easily accessed with software called a browser. It is named the Web because it is made up of many sites linked together; users can travel from one site to another by clicking on hyperlinks.
HTML HyperText Markup Language. This language allowed for the relatively easy creation of web pages that can be easily linked to all kinds of content, including other web pages or sites.
web pages Documents or files, written in HTML, that are stored on a web server and can be viewed over the Internet using a web browser.
web browsers Computer programs that provide computer users with a graphical interface to the Internet.
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Today, the Internet is a global medium. Peo- ple around the world use it to read news, re- search products, stay in touch with friends, and share information. They do so using high- speed broadband access, which makes it easy to watch videos, listen to audio programming, and download large files.
This new medium has proven highly popular.
The Web has grown from about 50 sites in 1993 to over 206 billion by 2010.4
Web Portals and Popular Websites The first big Web success stories were known as portals. A portal is a site that provides an array of content and services so broad that (it is hoped) users spend a lot of time at the portal and very little time anywhere else. Portals, like Yahoo!, want to keep visi- tors for as long as possible to create many opportunities for exposing visitors to ads or fee-based content. Thus, making money at a portal involves attracting lots of people and keep- ing them around so they can see advertising. You may be thinking that this revenue model seems similar to that of tradi- tional media and, in fact, it is. Yahoo! remains one of the most visited sites on the Web, reaching over a quarter of all Web users on a daily basis.
Social Media Social media exist on the Web, so it may seem strange to consider them as a separate category. But for advertisers, social media represent a very different opportunity than traditional web pages. First, social media, as compared with traditional, are uniquely created from audience content.
Audiences go to social media not just to read or be entertained, but to post, blog, share, and create. This has the effect of changing the goal for many social media advertisers. They don’t want consumers to only read or watch their messages, they want to engage them. They look for opportunities to get followers to share information about their brands. And they look to interact with them in a free-wheeling, somewhat uncon- trolled environment. The importance of social media can be seen by the fact that Facebook is beginning to challenge Google as the most popular destination on the Web. But what is
Making money at a portal involves attracting lots of
people and keeping them around so they can see advertising. . . . This revenue model seems similar to that of traditional media.
Even so, the portal model has been replaced over time. At- tracting large audiences and exposing them to banner ads proved unsuccessful. In many ways, this approach mimics tra- ditional media and misses all that is special and unique about the Internet.
Digital Interactive Today
Google and Internet Search Digital Interactive media have come a long way since the early days of the internet. From an advertising perspective, the most important trends include (a) the importance of search advertising; (b) the growth of so- cial media, especially Facebook; and (c) the increased impor- tance of mobile devices as technologies for accessing digital interactive media.
Most people looking to find information on the Web use a search engine. Search engines are sites that allow people to type a word or phrase into a text box and then quickly find information.
Brin and Page’s company, Google, is at present the most popular destination on the Web, reaching an astonishing 40 percent of all Web users each day.5 Search advertising revenues generate billions in revenue for Google, and in fact, represent the single largest category of ad expenditures in digital interactive media.
social media? OnlineMatters defines social media as “any form of online publication or presence that allows end users to engage in multi-directional conversations in or around the con- tent on the website.”6
It’s hard to believe that Facebook has existed for just over a de- cade as of the writing of this text. In October 2003 Harvard stu- dent Mark Zuckerberg launched Facemash, a program that allowed viewers to rate fellow students for their “hotness.” Zuck- erberg then registered a domain for “thefacebook.com” in 2004 and shifted the focus to connecting people with friends, family, and acquaintances. He had clearly tapped an important social need, such that by 2009 Facebook was the second-most-visited site on the Web. In 2013 Facebook experienced two events that attracted a great deal of attention from advertisers. The first was the introduction of Graph Search, a program designed to help people find information about people, interests, hobbies, and ac- tivities of unique relevance to them. This was important because it clearly put Facebook in competition with Google for search activities. The second event was Facebook’s success with mobile advertising on the site. In the summer of 2013 Facebook reported that nearly 40 percent of its advertising revenue was coming from ads served on mobile platforms. This surprised marketers and investors alike, as both groups had expressed doubts about portals Web pages that
provide starting points or gateways to other resources on the Internet.
search engines Websites that are devoted to finding and retrieving requested information from the Web. Because search engines are the
gatekeepers to information on the Internet, they are extremely popular with advertisers.
social media Digital media that connect individuals.
Facebook’s ability to be successful on mobile devices. While Facebook is not the only social media site on the Web (see Ex- hibit 12–3), it is a dominant one at present.
Pinterest, Snapchat, Facebook, and Twitter have revolutionized the way we communicate with each other, allowing one person to share anything that interests them, with his or her entire friends list, whether that be related to work, politics, leisure, family, shopping, product use, or other.
An attribute that attracts advertisers to social media is open- ness. When someone posts to Facebook, comments on anoth- er’s blog, or posts a description of themselves on LinkedIn, that information may be open for anyone to see. A host of tools collects all of this information using keywords. Nielsen’s Buzz- metrics or J.D. Power’s Umbria Communications help market- ers aggregate all the information being posted about their brands or products to understand the general consensus, nega- tive or positive. Brands like Oreo, Coca-Cola, Virgin America, and Procter & Gamble all have a social media component for each brand or product they market.