Page 108 - Marketing the Basics 2nd

100 Marketing: the Basics
MSN. Paid text ads are displayed in high visibility areas when a visitor conducts a search query using the keyword the advertiser purchased. SEM has become quite the cash cow. In 2007, advertisers spent $12.2 billion in North America, and that number is expected to exceed $25 billion in 2011. The click-through rate (CTR) on text ads is fairly high – they average about 10 per cent, which is much higher than the CTR of banner advertisements, which is less than 1 per cent.
BANNER OR DISPLAY ADVERTISEMENTS
Banner or display advertisements appear mainly on popular sites such as MSN, ESPN and Facebook. Banners are typically purchased for particular pages of a website, and rotated for viewing with other ads each time the page is displayed. The website is carefully chosen to reach targeted demographics. Each time the ad is displayed an impression fee is levied on the marketer. The aim of banner ads is to entice the customer to click on the ad and be taken to the advertiser’s website. As mentioned above, the CTR for banner ads is extremely low, less than 1 per cent. Marketers call this phenomenon banner blindness. Despite the low numbers of clicks generated, banner ads continue to be a popular form of advertising.
SOCIAL NETWORKING
Social networks are online communities where individuals share details about their personal interests and content with others. Facebook, Flickr, MySpace and YouTube are examples of such websites. Hundreds of millions of people have accounts on social networks today. Companies are still experimenting on how to best use social networks to engage ‘friends’ of their brands. A friend of a brand is potential brand evangelist. These individuals will participate in word-of-mouth marketing on behalf of the brand to others. Companies that nurture the enthusiasm of their friend network have the potential to have their message spread virally.
In 2009, Google teamed up with Twitter to sell ads and encourage businesses to start tweeting on the social communication site. Google offered marketers the ability to display their business’s five most recent tweets as ad units that would display across websites