Appendix: Interactive Advertising
This is a brief appendix that looks at online advertising. Some of it's pretty basic, but it's worth recording nonetheless.
Ad Serving
The process begins when a user requests a page from a site. A process is kicked off that inserts an ad into the page and inserts it into the code, for display on the user's screen. If all goes well, the user sees it, clicks it, and arrives at the destination site. If all goes perfectly, the user completes an action (makes a purchase right away). If all goes superbly, the user becomes a regular visitor and repeat purchaser on the advertiser's site.
Methods of Serving Ads
- A "static" ad is hard-coded into the HTML source of a page. Until it is removed, every user who visits that page sees that ad.
- An "insertion" ad is not hard-coded into the page, but is inserted from a database, either based on a schedule or in a random rotation
- A "dynamic" ad goes a step further: it is loaded based on certain criteria, which may have to do with the user profile or previous behavior on the site.
Methods of Measuring Ads
There are various metrics for advertisements:
- Impression - Is recorded when the ad (typically the graphic file) is downloaded by a user.
- Click - Is recorded when the user clicks the link associated with the ad and requested the advertiser's page
- Click-through - Is recorded when the user who clicked actually loads the advertiser's page
- Transaction - Is recorded when the user who clicked though completes a transaction (makes a purchase)
Measurement Problems
EN: The author skimmed over this, so most of it is my own notes, not from the book.
These measurements are problematic for advertisers:
- Impression - Just because they loaded the ad doesn't mean they saw it. They may have scrolled down before it appeared. Also, a single user may see the same ad on multiple pages
- Click - Is an objective measure - but it doesn't mean that the user waited for the advertiser's page to load.
- Click-through - Means to track when the advertiser's page has loaded, but is not a reliable measure: recall that the HTML page and graphics are separate files, and the "page" isn't complete until all files download.
- Transaction - Is the ultimate goal, and is objective.
These measurements are problematic for sites that sell advertising:
- Impression - If the ad graphic is loaded from cache, the published doesn't get credit for the impression. Also, the presence of a graphic ad on a Web page detracts from site performance. There is value in an impression, in that it creates brand exposure, even if the user doesn't click through.
- Click - When a user clicks out to an advertiser's Web site, they have left the publisher's site, and generally do not return. Also, the publisher has no control over the content of the ad, so he has no control over whether people click it.
- Click-through - The publisher cannot control user behavior once the site has left. And if the landing page is poorly designed, that's not his fault.
- Transaction - Again, the publisher has no control over the content of the advertiser's site. Moreover, if the user fails to complete the transaction immediately, but returns later to do so, the publisher gets no "credit" for the sale.
Also worth mentioning, much has changed in the past few years when it comes to Web site advertising. Text ads have replaced banner ads in many sites. There are a small handful of firms that control the majority of the business. Ads are now being embedded in videos and games, etc.