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Web Advertising


Advertising on the Web: Methods, Pitfalls, and Solutions

Much like the evolution of Web content that we have discussed in previous articles, advertising on the Web has matured over the last ten years. From banner ads to search engine optimization to pay-per-click advertising, companies large and small have several options for creating brand awareness and direct response campaigns on the Web that hold advantages over traditional advertising. Unfortunately, as with many Web experiences, the road to successful advertising can be fraught with peril.

The Rise and Fall of Banner Ads

The use of banner ads was the first form of internet advertising, and some companies continue to utilize banners ads successfully to this day. While the use of banner ads can be an effective way to get seen and can lead to response, many internet users perceive banner ads - particularly pop-up ads - as an annoyance and question their effectiveness.

Over the years, banner ads have provided less response for advertisers than originally anticipated. Their popularity has waned - and the cost of placing banner ads has significantly dropped - because advertisers felt they were not getting the same bang for their buck as if advertising in traditional media, though they were paying the same price per impression. While the gross impressions on major Web sites are high, the consumer bias against the ads, and the simple fact that they provide less response than originally anticipated, has forced advertisers to find new avenues and strategies for customer response.

Enter Search Engine Optimization and Pay-Per-Click

With the emergence of search engines as powerful online entities, search engine optimization (SEO) and pay-per-click (PPC) advertising have become the latest ad boom. In our last article, we discussed "organic" search engine optimization, techniques in which a company can build itself up in search engines using link exchanges and keywords. While organic SEO can be effective alone or in conjunction with paid advertising, PPC advertising can help ensure that a site lands at or near the top of searches. Using a PPC advertising campaign with a network such as Google Adwords can also help target ad dollars by placing an ad on content sites related to the advertiser's business.

More and more, companies are turning to PPC advertising rather than, or in conjunction with, organic SEO. The allure of PPC advertising is that advertisers pay only for clicks to the targeted Web site, so the site is getting 100% targeted leads (theoretically). Furthermore, the turnaround time is generally quicker for PPC ads, and they are easier to maintain than organic SEO. However, PPC ads not only cost money, but they can be costly in other ways.

Click Fraud

When using PPC advertising, advertisers expose themselves to "click fraud," a growing issue as the number of online advertisers continues to grow. There are essentially two forms of click fraud: the first is a devious way in which competitors can bury an on-line ad and virtually neutralize another company’s Web presence. A competitor can find an ad and click on it ad infinitum. Because advertisers are paying per click, and because they have set a limit on how much they are willing to spend, once that dollar amount is reached and the budget maxed out, the ad will disappear. Thus, the effect a competitor can create is two-fold: the ad budget will be spent, costing the advertiser money, and, more importantly, the ad will go offline and lose the future revenue it should have helped achieve.

The second form of click fraud, more prevalent than a treacherous competitor, is perpetuated by a host content site, often set up quickly to generate money, and then taken offline just as quickly. When Google, for example, places a PPC ad on a content site, whenever that ad is clicked, both Google and the host site get a percentage of the money charged to the advertiser. The more times an ad is clicked, the more the site host gets paid. While it’s not in Google’s interest to generate money this way, a host site can create a content page, put it online, get populated with PPC ads, implement software that can continuously click on an ad, make a lot of money quickly, and then remove the page from the Web before anyone is the wiser.

Small companies with relatively small ad budgets are generally safe from this kind of fraud. For large companies, although the potential for fraud exists, steps can be taken to mitigate risk. By looking at and understanding Web report data, a company can stop or slow click fraud. Unfortunately, because of the sophistication of perpetrators and the potential to generate a lot of money quickly, click fraud probably will never go away for good; however, by being attentive to the data, risk can be controlled.