Explain the models of

Internet Advertising

Programme – Master of Business Administration

Course name - E-Commerce and Digital Markets
Course code – MBA107
Name – Richik Das
Student code – BWU/MBA/23/034
Section – A
TABLE OF CONTENTS
01 Introduction
02 What is Online Advertising?
03 Cost Per Click (CPC)
04 Cost Per Action (CPA)
05 Cost Per Mile (CPM)
06 Cost Per Lead (CPL)
07 Strengths in Internet Advertisement
08 Weakness in Internet Advertisement
09 Conclusion
 Introduction
Online advertising, also known as web advertising or internet advertising, is a
marketing strategy that uses the Internet as a channel for sending promotional
messages to consumers. The 8 main types of online ads include product listing ads,
display ads, demand-side platform ads, affiliate ads, native ads, social media ads,
video ads, and email ads.
While online advertising is a highly cost-effective way to attract customers to your
site, if you’re just getting started, you can get overwhelmed by the overload of
options. That’s why we’ve decided to break down every kind of advertising in this
article - from how they work to their unique advantages. Read on to figure out what
kind of online ads are best suited for your business.
What is online Advertising ?
Online advertising, also called internet advertising, web advertising, or digital advertising, refers to ads
that appear on websites or in emails.

Unlike analog advertisements, online ads allow you to target a specific demographic, such as a certain
generation, gender, geographic region, or base targeting on historical data like past activity. Online ads
are also interactive, meaning that the user can respond to an ad through actions such as clicking and
visiting your site.

Another feature of online advertising is that you can easily track metrics and determine the effectiveness
of each ad campaign. With this wealth of data, you can analyze the result in-depth each time and identify
potential areas for improvement, to continually optimize your ads. And though it’s a recent development,
optimization through AI machine learning is also possible these days, and you can program an ad to
automatically choose images and generate copy with impressive accuracy.
Cost Per Click (CPC)
Sometimes people use PPC or Pay per Click for this advertising model, but it all signifies
one thing. CPC is online advertising where we pay the search engine every time
someone clicks on our ad. In the end, it’s how much we spend to get people to click
on our advertisement. We can also define CPC as an online advertising payment
model where cost depends completely on clicks. Search engines such as Google,
Bing, and Yahoo offer two options — they can charge us a flat rate per click, or let us
bid for paid inclusion in the SERPs (search engine result pages). When it comes to
popular social media platforms, Cost per Click is determined based on their
algorithms, our settings, and our desired audience.
 Cost per Action (CPA)

Another pricing method for marketing on search engines and online platforms is Cost per Action or
Cost per Conversion. Put into simple terms, that is the price we, the advertiser, we pay for every
person who takes a certain action we previously defined. For instance, when people advertise online,
they usually pay for people to click on their ads and do something specific. In some cases, it’s
registering, in others, subscribing to the newsletter, and in some, it’s leaving a contact.
Cost per mile (CPM)
At the moment, this is one of the most popular advertising models. It’s an advertising
model that the majority of media outlets use most frequently, as it provides them with
the best reach. Cost per Mille is how much we, the advertiser, pay for every thousand
impressions. That means that we get CPM simply by dividing the total cost by the
number of thousands of page views we’ve received because people came to our
website from the SERPs.

CPM is the best way for us to calculate the return on investment from advertising via
different media, platforms, and search engines. For instance, if we’re running
different advertising campaigns via different media, CPM will give you a good,
simple metric. That metric will allow us to see just how well our investment is doing,
or how poorly and where to focus our attentions.
Cost per Lead (CPL)
CPL might seem a lot like CPA, as they are both based on user actions, but they do differ
significantly. CPA is determined based on people performing elaborate actions, while CPL is
much more basic. Cost per Lead is all about the “lead”. A lead can mean that the user is leaving
simple contact information or performing a basic signup or even requesting a quotation. Another
difference is in control over the advertisement. The CPA model is publisher-centric, as they are
the ones who get to choose where and when they run our ads. However, the CPL model is
advertiser-centric, where we get to choose where our ads will be.
Strength & Weakness in Internet Advertisement
STRENGTHS

• CUSTOMERS ARE ON INTERNET: Do you know anyone who doesn’t use the internet? The
fact that it is so ubiquitous is probably the most compelling reason to get on board. Platforms like
Facebook, Instagram, Twitter and LinkedIn give us ample opportunities to put our products or
services in front of potential customers. The Google Display Network is a true advertising
behemoth with more than 2 million publisher sites on which we can advertise.
• TARGET EFFECTIVELY: Facebook and similar networking channels have troves of
demographics they share with advertisers, so we can hone in on users who are most likely to
purchase our products. Target prospective customers or clients by job title on LinkedIn,
connections on Facebook, or interests and behaviors on Instagram. Unlike the wide net approach of
traditional television and radio advertising, internet advertising lets us find the right prospects at
the right time and show them an ad they may care about.
Strength & Weakness in Internet Advertisement
STRENGTHS Contd.

• CLOSELY MONITOR SPENDING: We can spend thousands of dollars on a 30-second

television ad that might reach someone who might be interested in what we have to sell someday.
We can also spend thousands of dollars on internet ads, and only pay when people who are
interested in our products click on our ad. With digital ads, we can set a spending cap and limit the
number of times a prospective customer sees an ad in a given period.
• TRACK RESULTS: Digital advertising allows us to monitor and track the results of all our
campaigns. We can find out when a lead converted into a sale, note the platform where it happened,
and determine what kinds of ads are working best for our particular demographic. The internet with
all its minute tracking abilities allows us to measure the return on investment of our marketing
dollars.
Strength & Weakness in Internet Advertisement
Weakness

• COMPLICATED: There are lots of choices when it comes to advertising on the internet. We can
choose search advertising, so our ads show up when a target audience is looking for just what we
offer or display ads that appear where our most likely prospects roam on the internet. There are
even native ads that show up on publisher sites and blend in so well that they appear not to be ads
at all.
• MISTAKES CAN BE COSTLY: Because digital advertising is complicated, it’s not uncommon
for businesses to make mistakes. Choose the wrong keywords, neglect a bidding cap, target
ineffectively, or leave a campaign running when we thought it was off, and we can spend a fortune
without turning a single lead into a sale. For example, if we run a campaign on Facebook but our
customers are more likely to be LinkedIn users, we’re unlikely to convert a lead.
Strength & Weakness in Internet Advertisement
Weakness Contd.

• COMPETITION IS FIERCE: It depends on our products and market, but internet advertising
competition can make ads prohibitively expensive. If we can only afford 10 cents a word, but our
competitor can pay $10, we don’t stand much of a chance. For some businesses, it makes sense to
build a good website and then rely on traditional advertising methods that have always worked in
the past.
• AD FATIGUE IS COMMON: Have you ever been on a site and seen an ad for a product on which
you recently ran a search? That’s internet advertising at its most typical, but have we also noticed
that after a while, those ads don’t even register on our radar? It’s like they’re invisible. It’s a
common and pervasive problem with running ads on the internet. If the campaigns aren’t run
correctly, our brand and its products suffer from ad fatigue.
 And as a final piece of advice, when choosing an
Conclusion advertising medium, the best thing to do is to
define your target audience, advertising budget,
and research which channel your audience is
likely to be most active on, and base your
decision on this. Every business and customer
base will be totally different, so you really have
to find the medium that works best for you and
your current situation.
Thank you