Online Advertising – A Primer

Intro:

After realising that there was a dearth of individuals writing about entry-level media analytics topics (a quick google reveals a ton of companies keen to sell you their analytics services and software), I decided to start a blog to (hopefully) demystify the online media space and shed some light on what it actually means to be a media analyst. I feel I should highlight here that although I have dabbled in a wide variety of different online (and some offline) media analytics during my career, my expertise lies in “display” advertising (picture / video ads) as opposed to email, search engine, social media or affiliate marketing  (although I have worked with data from all of the above).

But, before I begin to delve into the acronym soup that is online media analysis, I should probably give you a quick rundown on how we got to where we are today.

ARPANET, BBS & USENET

The internet started its life as ARPANET (Advanced Research Projects Agency Network), which was conceived to simplify computer-to-computer communication between different research agencies and universities and enable quick and easy distribution of research results and updated software. Interestingly, the first piece of online marketing was carried out via ARPANET: On 3rd May 1978, a piece of spam (1) from the Digital Equipment Corporation was sent to 393 recipients taken from the ARPANET directory; its content was as follows:

DIGITAL WILL BE GIVING A PRODUCT PRESENTATION OF THE NEWEST MEMBERS OF THE DECSYSTEM-20 FAMILY: THE DECSYSTEM-2020, 20201, 2060. AND 2060T.
THE DECSYSTEM-20 FAMILY OF COMPUTERS HAS EVOLVED FROM THE TENEX OPERATING SYSTEM AND THE DECSYSTEM-10 LPDP-1A COMPUTER ARCHITECTURE.
BOTH THE DECSYSTEM-2060T AND 20201 OFFER FULL ARPANET SUPPORT UNDER
THE TOPS-20 OPERATING SYSTEM. THE DECSYSTEM-2060 IS AN UPWARD EXTENSION OF THE CURRENT DECSYSTEM 2040 AND 2050 FAMILY. THE DECSYSTEM-2020 IS A NEW LOW END MEMBER OF THE DECSYSTEM-20 FAMILY AND FULLY SOFTWARE COMPATIBLE WITH ALL OF THE OTHER DECSYSTEM-20 MODELS.

WE INVITE YOU TO COME SEE THE 2020 AND HEAR ABOUT THE DECSYSTEM-20 FAMILY AT THE TWO PRODUCT PRESENTATIONS WE WILL BE GIVING IN CALIFORNIA THIS MONTH. THE LOCATIONS WILL BE:

TUESDAY, MAY 9, 1978 – 2 PM
HYATT HOUSE (NEAR THE L.A. AIRPORT)
LOS ANGELES. CA

THURSDAY, MAY 11 , 1978 – 2 PM
DUNFEY’ S ROYAL COACH
SAN MATEO, CA (4 MILES SOUTH OF S.F. AIRPORT AT BAYSHORE, RT 101 AND RT 92)

A 2020 WILL BE THERE FOR YOU TO VIEW. ALSO TERMINALS ON-LINE TO OTHER DECSYSTEM-20 SYSTEMS THROUGH THE ARPANET.
IF YOU ARE UNABLE TO ATTEND, PLEASE FEEL FREE TO CONTACT THE NEAREST DEC OFFICE FOR MORE INFORMATION ABOUT THE EXCITING
DECSYSTEM 20 FAMILY.

Inspiring, no? As this was before the advent of “bcc-ing”, the recipient list was sent to everybody, and in some cases overflowed into the body of the message, causing a number of computers to crash. The ‘acceptable use’ policy of ARPANET included a prohibition of communications for commercial purposes; the backlash was vehement enough to keep spam off the ARPANET for a long time to come.

With the advent of BBS (Bulletin Board Systems) and USENET Forums, spam spread to these environments, with the first recorded instance being a religious message cross-posted to every USENET group. The first commercial spam on USENET was an advert for an immigration-focused law firm, bulk posted to every group on USENET. It had the title of “Green Card Lottery – Final One?” proving that click-bait is by no means a new invention.

The Internet

There’s not really a specific date for when ARPANET and other networks like it became the internet; a gradual linking of geographically disparate networks (via “Internetworking” protocols), the subsequent updating of these protocols to obviate the need for a central backbone to the system, and the advent of HTML all eventually led to a system recognisable as “The Internet” as we know it by the early 1990’s. Of course, advertising wasn’t far behind: The first ‘mainstream’ banner ad appeared on hotwired.com (the website of Wired magazine at the time) on the 27th of October 1994, and looked like this:

firstbanner

It was an advert bought by AT&T, and clicked through to a site offering virtual tours of renowned art museums around the world. 44% of people who saw it clicked on it – a fact made recordable by tracking code embedded in the ad. Never before had there been the ability to directly scrutinise the impact of an advert (did someone click on it, did it lead to a sale?). Understandably, marketers were excited about the prospect of trackable advertising, as previously it was basically impossible to see the direct effect of a particular advert on a per-user basis. Tracking for commercial purposes has subsequently expanded across the web, and a whole sub-market exists based around the buying and selling of tracking information to gain an edge on the competition online.

Following display advertising another avenue opened up to advertisers, with GoTo.com (an early search engine, eventually acquired by Yahoo!) offering the first keyword auction in 1998 (a system whereby advertisers bid on the keywords they want their ads to appear under), followed by Google in 2000.

Modern day

At this point, we’re at the baseline for advertising on the internet – Most forms of advertising online owe their origins to email advertising (both legitimate and spam), banner advertising and search engine marketing. The ads themselves, tracking methods and the mechanisms for buying and selling them may have become more complicated and convoluted, but the current state of affairs is mostly just an evolution of these basic building blocks. However, there are a couple of other ‘channels’ that deserve a mention:

Affiliate marketing – Paying someone (usually a content-appropriate blogger or the like) a per sale bounty for selling your product on your behalf. For example, a telco might pay a phone-focused tech blogger a bounty for every new phone contract they help sell (most commonly by driving traffic directly to the advertiser’s website). Due to the small size and large number of potential affiliates, a whole sub-industry has arisen to aggregate affiliates into categories and match them with appropriate advertisers.

Social media community management – Whereas sponsored posts and the like are a direct descendant of the original banner advertisement, this is an entirely different kettle of fish. Community management is about keeping your fans happy, managing fallout from scandals and building a closer relationship with your customers online. Not advertising in the traditional sense of “putting a message in front of someone” but very important in a wider marketing plan.

The future (of this blog)

Throughout my subsequent posts, I’m going to explore tracking, metrics, markets and a whole host of other topics related to the modern media landscape, from the view of a media analyst. I hope that it will help to shed some light on the industry and what it means to be an analyst in this space.

 

(1) A term coined from the Monthy Python ‘Spam’ Sketch, where the chorus of Vikings repeatedly singing ‘Spam Spam Spam Spam… Spammity-Spam, wonderful Spam!’ drown everyone else out.