{"id":233,"date":"2018-06-14T19:05:00","date_gmt":"2018-06-14T19:05:00","guid":{"rendered":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch14-3\/"},"modified":"2026-02-03T15:53:34","modified_gmt":"2026-02-03T15:53:34","slug":"ch14-3","status":"publish","type":"chapter","link":"https:\/\/pressbooks.ccconline.org\/bus3060\/chapter\/ch14-3\/","title":{"raw":"14.3 Understanding the Increase in Online Ad Spending","rendered":"14.3 Understanding the Increase in Online Ad Spending"},"content":{"raw":"
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Learning Objectives<\/span><\/p>\r\n\r\n<\/header>\r\n

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After studying this section you should be able to do the following:<\/p>\r\n\r\n

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  1. Understand how media consumption habits are shifting.<\/li>\r\n \t
  2. Be able to explain the factors behind the growth and appeal of online advertising.<\/li>\r\n<\/ol>\r\n<\/div>\r\n<\/div>\r\n \r\n\r\n<\/div>\r\n

    For several years, Internet advertising has been the only major media ad category to show significant growth. There are three factors driving online ad growth trends: (1) increased user time online, (2) improved measurement and accountability, and (3) targeting.<\/p>\r\n

    American teenagers (as well as the average British, Australian, and New Zealander Web surfer) now spend more time on the Internet than watching television1<\/sup> (Hendry, 2008)2<\/sup>. They\u2019re reading fewer print publications, and radio listening among the iPod generation is down 30 percent (Tobias, 2009). So advertisers are simply following the market. Online channels also provide advertisers with a way to reach consumers at work\u2014something that was previously much more difficult to do.<\/p>\r\n

    Many advertisers have also been frustrated by how difficult it\u2019s been to gauge the effectiveness of traditional ad channels such as TV, print, and radio. This frustration is reflected in the old industry saying, \u201cI know that half of my advertising is working\u2014I just don\u2019t know which half.\u201d Well, with the Internet, now you know. While measurement technologies aren\u2019t perfect, advertisers can now count ad impressions<\/a><\/span> (the number of times an ad appears on a Web site), whether a user clicks on an ad, and the product purchases or other Web site activity that comes from those clicks3<\/sup>. And as we\u2019ll see, many online ad payment schemes are directly linked to ad performance.<\/p>\r\n

    Various technologies and techniques also make it easier for firms to target users based on how likely a person is to respond to an ad. In theory a firm can use targeting to spend marketing dollars only on those users deemed to be its best prospects. Let\u2019s look at a few of these approaches in action.<\/p>\r\n\r\n

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    Key Takeaways<\/span><\/p>\r\n\r\n<\/header>\r\n

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