The Science Of Advertising
You may have thought of advertising your product online, but found it difficult to identify your exact audience, or to come up with a compelling reason to do so. Knowing how online advertising really works could help you plan your ad spend wisely–or even start your own advertising service!
Do you think you are affected by advertisements? Do you recognise the companies with the slogans, ‘Information technology, today, tomorrow’, ‘Just do’ , ‘Connecting people’, ‘Fly the good times’, ‘Wherever you go our network follows’, ‘Connecting India’, ‘The nation banks on us’, and ‘Taste the thunder’? If you recall even some of these, then you have to agree that advertisements do have some impact on you.
Companies spend crores of rupees on advertising because they know consumers are affected by advertising Microsoft MCTS Training. The goal of advertising is to influence the purchasing behaviour of as large a population of consumers as possible. So how do companies plan their advertising expenditure?
Ad pricing
On traditional advertising media like TV, radio, print and billboards, the pricing is based on how many eyeballs or ears the advertisement captures. This is the cost-per-view model. For TV or radio, ad rates go up during a cricket match, because there will be a larger audience. Print ad rates are also based on the total readership of the edition.
In the world of online advertising, pricing is more complicated. Not only do you have cost per view options, but could also have cost per click (based on the number of times the ad is clicked on); or, if it is an online merchandising site, then it is based on ‘cost per action’–the number of times a product is purchased. The pricing model can be fixed or dynamic. The most popular dynamic model is the search-term-based advertising that has been popularised by Google. An advertiser has to bid for a keyword in an online auction. Popular keywords like ‘job’ go for many thousands of rupees; less popular keywords like, let’s say, ‘lalu’ go very cheap. Have you noticed the sponsored links to the right of your Google search results? The advertiser showing up at the number one spot bid the highest for the keyword you used in your search; those who bid less are ranked below this. Every time you click a sponsored link, the advertiser has to pay the amount that they bid to Google, Microsoft MCITP Certification.
We are watching you: We know what you need
Advertisers today try to collect as much information about you as they can–they can cash in on this knowledge by serving you ads tailored to your preferences or positioned to take advantage of your plans, as determined by your online activities. For example, when you search for a tandoori restaurant, the search engine dishes out related sponsored ads based on your search ‘interest’–your apparent plans to eat out. Similarly, when you read an e-mail about summer vacation plans in Goa, your friendly e-mail provider serves you hotel and airline booking ads, hoping to capture a booking or sale for their advertisers. This is true of SMS messages too; every SMS you send is automatically analysed to learn your interests, and to serve you relevant advertisements.