The New York Times carried an article on May 19, 2007 titled 'Internet Giants Vie to Snap Up Web Ad Firms'. The article went on to comment as to how Google acquired the online ad company DoubleClick for $ 3.1 billion, Microsoft buying aQuantive for $ 6 billion and the world's largest ad agency WPP acquiring another online ad company. These large deals totaling more than $ 10 billion happened in the last 30 days. Google and Yahoo are the giants already in the business of online advertising. Why are the technology giants rushing into media and advertising? If WPP is acquiring an online advertising company, it is not surprising because that is its business. The market share of internet advertising is expected to go up from 5.8% in 2006 to 10.2% by 2010. The present global ad market pie is estimated at $ 285 billion. The article also said that there is a shift from traditional media like Print, Radio and TV and all the large advertisers are increasing their ad spends on the internet. Everybody related to the media business wants a piece of the pie. Internet advertising is no longer a skeptical option. However, the success of online advertising will depend not on technology alone but also on selection of correct web sites, as otherwise the advertisers will not get the right customers visiting them. For too long the internet media firms have been targeting on numbers and volumes, ignoring the type of users and web sites. The internet is a niche market. The media planners have to do a better job to keep all concerned happy. Advertising creates an awareness but does not guarantee a sale. In view of it choosing the right vehicle is critical.
When organizations need to advertise their products or services or recruit right candidates but have to keep the costs down, what should they do? TV is beyond the reach of most, barring the giants. Newspapers are very expensive and have limited shelf life. Internet is a cost effective option, available 24/7/365, but there are millions and millions of them. Job and Newspaper Portals are also good options but the ads get lost in the clutter. How do you search for products or services or people or jobs amongst so many? Who has the time to search? Well employed and good people do not look for jobs! What is the solution? How do you attract good and employable people? You must have a regular presence on the web but how do people know you, what you offer and your needs, even if you have your own web site, unless you are a well known giant? You must advertise in the right portal? How good are the search engines? Can they replace human judgment? Is the 'pay per click' (PPC) concept giving the right results or is it a myth? How many genuine people click on such ads? Weren’t there some complaints about frauds in such schemes some time back? The PPC concept appears fair to the advertiser because he pays only if someone clicks and to the ad distributor because he charges a minimum fee, whether the ads get clicked or not. What about the publisher? The sheer volume of competition amongst publishers has led to this situation. The industry is responsible for the hype that one can get rich through the web which only encourages fraudsters.
Google and Yahoo are both pioneers in search engine technologies along with MSN, ASK, AOL etc., but Google is able to monetize better than others. Google places image or text or combination of both using its unique search engine technology. The technology needs more refinement and it can't be said that it is perfect. Some irrelevant ads do appear on pages not related to contents. To what extent such advertisers benefit is not known to us. The success of Google is in attracting a lot of advertisers but the scheme is loaded heavily in favor of such service providers and not the publisher. It is a win-lose situation and will end up as a lose-lose situation for all in the long run. In publishing, the running costs are high because the contents have to be reviewed and changed constantly. If online advertising has to be a success, it is necessary to protect the interests of all stakeholders.
© May-07. www.madgopes.com. All rights reserved.
Online Advertising - To learn more about this author, visit Madhavan T Gopalachary's Website.
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Madhavan T Gopalachary
(Visit Madhavan's Website)
Madhavan Gopalachary, nick name "madgopes"
(g pronounced as in go) given by IIT
classmates, is a Mechanical Engineer and
an alumnus of Indian Institute of
Technology, Madras having passed out
specializing in IC Engines &
Thermodynamics.
He has nearly 35 years of experience in
the Corporate World. He started off as a
trainee and handled sales, marketing,
manufacturing, product management, profit
center management, strategic planning and
corporate development including R & D in
various organizations and at various
levels before becoming a CEO. His last two
professional assignments were at CEO level
before embarking to start management
consultancy business on January 01, 1998.
He has worked for British, Swedish MNCs as
well as very large Indian business houses.
He has spent a large portion of his time
from June 1998 till date in East African
Countries practicing as an independent
Management Consultant.
More details can be obtained at the
following web sites:
mmg.name/
mtg.html
mmgconsu
lting.biz/
Madhavan's articles can be accessed at www.madgopes.com
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