Encyclopedia of Computer Science and Technology

344 online advertisingnew structure that replaces the traditional foundation witha decentralized approach combining nonprofit and for-profitinitiatives focusing on empowering individuals and communities.Omidyar has also been investing in microfinancing(the making of small loans directly to poor entrepreneurs indeveloping countries).Further ReadingCohen, Adam. “Coffee with Pierre: Creating a Web CommunityMade Him Singularly Rich.” Time, December 27, 1999, p. 78ff.———. The Perfect Store: Inside eBay. New York: Little, Brown &Company, 2002.Ericksen, Gregory K. Net Entrepreneurs Only: 10 Entrepreneurs Tellthe Stories of Their Success. New York: Wiley, 2000.Pierre’s Web (blog). http://pierre.typepad.com/. Accessed May 6,2007.Sachs, Adam. “The Millionaire No One Knows.” Gentlemens’ Quarterly,May 2000, p. 235.online advertisingIn the late 1990s “banner ads” started to appear on Websites, and other forms of advertising soon followed. Companiesrushed into the online world, either with the belief thatit had unlimited potential for finding new customers, or outof fear that the competition would get there first. Unfortunatelyit was hard to measure the actual effectiveness ofads, and Web sites (such as for publications) that lookedto third-party advertising as a source of income found theoutlook bleak in the wake of the bursting of the “dot-combubble” of the early 2000 decade.Only a few years later, however, advertisers using newbusiness models and targeting techniques have made onlineadvertising not only a viable business, but a rapidly growingone. (According to the Interactive Advertsing Bureau,Internet advertising revenue in the United States in 2007was $21.2 billion, up 26 percent from 2005.)The effects of the online advertising revolution are ripplingoutward, impacting traditional advertising mediasuch as newspapers (in particular see craigslist), magazines,and even television.Platforms and Types of AdsThere are many different applications that can be accompaniedby different types of advertising. These include e-mails(free e-mail services usually include an ad in every message),newspapers and other publications (often with ads related tothe subject of an accompanying article), and even blogs (seeblogs and blogging). Indeed, the most popular blogs canactually make a reasonable income from advertising.Types of ads include the following:• Banner ads are contained in rectangles, often at the topof the Web page. (Sometimes they can mimic dialogboxes from the operating system.) They still accountfor about half of all online advertising, and can appearon sites of all types.• Pop-up or pop-under ads appear above or beneath thecurrent window, respectively.• Floating ads appear over the main page content, oftenmoving across the screen.• Interstitial ads are displayed before the requestedcontent (such as an article or video) is shown. Theyrun for a specified period of time, although they cansometimes be closed by the viewer.Many ads are animated; some even contain video clips.There are also ads formatted for mobile devices, includingtext messages sent to cell phones.Economics of Online AdvertisingA company or organization can of course advertise its ownproducts or services on its Web site. Alternatively, a sitecan arrange with an online advertiser to carry ads for otherpeoples’ goods or services, in exchange for a fee. The advertiserin turn gets paid by the company whose ads are beingrun. The payment can be calculated in a variety of ways:CPM (cost per thousand people who see the ad), the numberof sales leads, or the number of people who actually buysomething.As the first luster of the Web began to wear off, corporateadvertising departments increasingly wanted bettermeasurements of the exposure their ads were receiving, andwanted ads that were better targeted to people more likelyto “click through” to the advertiser’s site. Since it involvespeople who are already looking for specific things, Websearch is an effective and profitable activity to be linked tocontextually related ads. Google in particular has been verysuccessful in auctioning or selling the opportunity to haveone’s ad appear in the results of a search request containinga specific keyword (see Google).Another way that Google and other large search enginesor portals can make money from advertisers is through“affiliate marketing”; Google’s version is called Ad Sense.Participating Web sites are indexed, and the resulting keywordsare matched with ads awaiting placement. The sitecarrying the ad generally gets a per-click payment. However,the problem of “click fraud” has also arisen: Scammerscan set up an affiliate site and then use special software togenerate the clicks, while making them come from a varietyof sources. Despite these problems, in 2006 about 40 percentof revenue from online advertising was attributed tosearch-related ads.While search engine usage perhaps provides the mostdirect indication of consumer interests, considerable attentionhas also been focused on developing systems that cantrack where a given individual goes on a large e-commercesite (see cookies), and look for clues about likely futurepurchases (see data mining).Maintaining User InterestThe dark side of online advertising is found in programsthat are surreptitiously installed on users’ PCs and thendownload and display advertising from shady Web operations(see spyware and adware). While many users nowregularly run programs to block such malware, even legitimateonline advertising can irritate users, particularly