The rise of the digital economy has changed the way we communicate and do business. It forces us to implement emerging new technologies to stay competitive with regards to our marketing campaigns. This article focuses on next generation online marketing, taking into consideration various types of online advertisement opportunities to give a rough overview of the broad subject.

Search engines and search networks

Search networks are a combination of a search engine and other sites where a particular ad will be displayed For example a paid search ad on Google will also show up on the results pages of AOL. The engines and the networks make their money by displaying keyword targeted advertisements on earning money each time a user clicks on the ad. Advertisers choose exactly which words on which they might appear. Search engines and search networks work for all levels of advertisers. They offer the most granular targeting options and are generally the most popular choice of advertisers – from those who spend $50 per month to those who spend more than $5 million. The best known companies in this space are Google, Yahoo, MSN, etc. It has a lot in common with the next category, contextual advertising.

Contextual advertising

Similar to search, advertisers in this space show keyword targeted ads on a cost per click basis. The major difference between this sector and the search engines is where the ads are shown. Contextual advertising displays ads not on the results pages of various search engines but on content web sites - usually on the side of the page. Companies dealing with this type of technology generally scan the content of the page and determine a set of keywords that matches the content to show then text ads that correspond to the keywords they determined. Several of the major search engines, such as Google and Yahoo! offer contextual advertising in addition to traditional advertising on search pages.

Affiliate advertising

Next up in the online marketing landscape comes affiliate advertising using affiliate networks.  What makes affiliate networks an attractive choice is that unlike the major search engines, contextual solutions, and display ad networks, with affiliate networks, advertisers pay on a pure performance metric such as cost per lead, cost per sale, or percentage of sale. Advertisers do not pay on a cost per click or cost per impression basis. The true affiliate network is primarily a technology solutions provider and marketplace creator that offer a turn key solution for websites to work directly with individual websites looking to promote offers of their choice. With affiliate networks, the advertiser doesn’t have to build technology for tracking the performance of each affiliate, nor do they have to worry about payment to multiple parties. As part of the solution, affiliate networks handle the tracking and payment, the advertiser pay only one check to the network who then disburses individual payments based on the site’s individual performance.

Graphical advertising/display ads

Graphical advertising, or display ads, make up another major area of online advertising. Yahoo! alone generates 25 billion ad impressions (an impression being defined as an ad loading on the page). Combine Yahoo, AOL, and MSN, not to mention the thousands of other smaller, but still popular websites, and you can see how this form of advertising accounts for up to 50% of all internet advertising dollars. Managing advertising spend across a large number of sites takes a lot of resources, and even if you have such resources, there still exists an incredible amount of impressions that you most likely did not capture. The sheer number of sites and volume of combined impressions they generate opens the door for businesses such as the display ad networks. These companies focus on aggregating sites together so that an advertiser can through them reach hundreds of sites. Display ad networks make their money by keeping some percentage of the ad dollars paid to them that they show on the websites they aggregate, which they call publishers. Among the most complex parts of understanding the display ad network business are the seemingly subtle differences among the various companies that operate in this sector. Besides reach, the individual sites that make up the network are another factor. Different sites have different types of traffic. It’s worth placing an order to see if the sites come from well-known names or niche sites. How the networks can target the traffic makes up the third differentiating factor. In other words, does the network offer advertisers the ability to pick specific sites to run on, a channel / vertical based approach, or simply run of network (no real targeting). Targeting by country along with options for showing the ad only on specific times and days has become standard across the major networks. Fourth is the payment metric for showing their advertisements. Advertisers that want to target specific sites, channels, etc., will find themselves paying on an impression basis, whereas several networks offer pure performance (cost per action, for example) options, but the trade off tends to be less specific targeting options. Display ad networks work best for advertisers whose product reaches a wide audience and ones that have significant online advertising experience. Brand advertisers and those with a performance goal (a certain cost per signup) have used display ad networks quite effectively.

Always remember the following: Firstly, the value of the customer should be high (a customer in each of the types of businesses above is worth several hundred if not several thousand dollars to the companies). Secondly, there should be a high demand for the product, i.e. many people need it. Thirdly, the offer should not have geographical constraints, such as being available only in a limited number of cities, and lastly, the product should have continuous demand.

With automotives for example, there are always people looking to buy new cars, just as there is a year-round need for people to buy a house. Most importantly, from an operational perspective, each of the companies that currently operate in the lead generation space has into place mechanisms for accepting in-bound leads and transmitting them to sales representatives who work on turning these leads into customers. The lead itself isn’t worth money to the advertiser, which highlights the importance of a process that can convert some of the leads into sales.

Incentive promotion

Lead generation and co-registration come together in a way to make up the next area of digital marketing – incentive promotion. Advertisers might not know the sector by this name, but they have without a doubt seen these types of advertisements. Incentive promotion companies draw users into a signup process with compelling and high value prizes. An interesting point to note: companies who do incentive promotion end up attracting users not for a particular offer but for a variety. It is similar to co-registration as they make their money of a sign-up process, but what makes them unique is their focus on actively drawing in users. They take advantage of the fact that there are more impressions on the Internet than specific advertisers who can buy them.

The typical incentive promotion site has users enter their email address on the landing page (where they go after clicking on an ad); then, users enter their shipping address; after which they will see a variety of co-registration style offers, where if they choose to, they can fill out additional information to learn more. These offers do not relate to the prize; they exist to help the incentive promotion company subsidize the cost of media. The final page in the process is a set of offers that users must complete in order to receive their free prize. The advertisers listed here are all customer acquisition related, where each new customer carries a moderately high value, and has experience at valuing a particular customer’s worth. ISPs and other subscription services are two good examples. They know exactly what they can pay for a new customer. At the end of the day, incentive promotion companies drive millions of new customers to companies. They also operate in a delicate balance. They drive new customers when that intent doesn’t initially exist – for example, users come looking for a free gadget, not for a credit card offer. The power of incentive promotions comes from that ability to take one and turn it into the other, but it also means that marketers will receive on the whole a lower quality user. The millions of people who enter their email address for a prize not only help drive new leads to companies, they also make up a big percentage of the audience for our next segment, email marketing.

Email marketing

To succeed in incentive promotion requires a lot of focus and skills, which calls to order email marketers and offers as well a chance for list management companies and their customer retention management systems so that a company can communicate with its clients.

The best email marketing companies often can drive large amounts of volume for companies on a performance basis, but please be aware and respect existing legislation.

Search engine optimization (SEO)

If you have a web site, you will want to make sure that it is optimized for the search engines. Paying for traffic works, but most would prefer receiving some traffic for free, which is the core business of firms that offer search engine optimization (SEO.) Once you have traffic, you most probably want to get some insights into it, for instance, finding out what links your web visitors’ click on, how much time they spend there, etc. Here, companies such as Hitwise or Clicktracks could come into action to support you. Or, you might want to leverage a system that enables you to easily show certain content depending on where the user comes from.

Video streaming

Video streaming is certainly not a new concept and has been around for some time, but it’s only now making its way into the online marketing scene. It's now easier than ever to add streaming video content to your website. The technology required to enable video streaming is widely available, it's relatively inexpensive and with the dramatic growth in high speed, broadband internet connections, a growing number of Internet users can now view high quality, streaming video on their computers and mobile devices.  Whist video streaming has yet to become a mainstream marketing tool, this may soon change.

Video streaming provides a number of useful opportunities for maximizing the potential of an existing corporate video. And compared to other distribution media such as DVD or CD-ROMs it also offers a cost-effective solution for broadcasting a new corporate presentation to a wider audience. Whatever video streaming clips you use, try to ensure they are branded with your corporate identity. This could be a small logo in the top corner of the screen or a 'picture frame' wrapped around the moving images. Taking it a step further, you may want to add an introduction sequence with animated corporate logos at the beginning and end of every sequence. Another option is to create an HTML or Flash 'player' customized with your corporate identity. The video clip would then play within this frame and could be complemented by some animated product or service information around it.

Another benefit of video streaming to take not of: When reviewing website statistics, it is frequently pages featuring streaming video content that are the most 'sticky' and have the longest viewing times by site visitors. Use this factor to your advantage - it's an ideal opportunity to get your core brand values, products and services across to the site visitor. I know that this article barely scratches the surface of online marketing, but I hope that it gives you an overview of what it can deliver. The industry is still new and evolving with continuously developing new technologies, services and strategies so that it’s hard to predict where the industry will head in the future.

By Daniela La Marca