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Internet advertising basics


This text will teach you how Internet advertising performs. There are lots of terms which could be new and unknown to you, if you are a beginner. So if you find terms like this, you can learn their meanings in our Internet dictionary.

Advertising on the Internet is similar to advertising anywhere else. There are people or companies selling goods or services who wish to let potential customers know that they exist and have products or services to offer. These are known as merchants, or advertisers.

At the other end, there are people or companies with means of telling the customers about the advertiser's goods and services. These have been companies such as newspapers, magazines, billboard companies, and television broadcasters. These are known as the advertising media, publisher, or broadcaster. In Internet advertising these are usually called affiliates, or associates. For example, if you have high traffic on your site, and want to make money from rotating banners you are affiliate or associate.

There are many occasions when affiliates or associates are connected with publishers by Internet marketing agencies. These agencies are middlemen. They get commision when they make a deal between publisher and associate. The biggest Internet marketing agencies are Doubleclick, Valueclick, Engage Media, Linkshare...

There are a lot of possible deals between publisher and associate. The most popular are following programs or deals: CPC (Cost Per Click), CPM (Cost per Thousand), Pay per sale, pay per lead... Publishers have to plan their ads, figure out where to place them, and pay for them in advance, all with no real certainty that there would be any performance, or sales from the ads. Publishers may pay after finishing the deal or program. For example, they will pay you $100 after 500 click-throughs, or after 20,000 impressions. Sometimes they will pay you only for sales made from your site, that is Pay per sale program.

The standard style advertising on the Internet is often in the form of advertising banners placed by advertising agencies or brokers on certain websites and paid for monthly, or number of times it is shown on the website (impressions). In this case, the website is the host, or media. These agencies pay from $1 to $10 per thousand views or impressions.

Internet advertising has many sides. Some companies or agencies pay a commision on the the actual sale, some pay by the number of impressions, click throughs, or leads from a given affiliate. These are variously called referral, affiliate or associate programs. Many also pay for recruiting another affiliate, usually by paying a percentage of the recruited affiliate's earnings. These are known as two-tier, or multi-tier programs.

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