Sponsorships. After banner ads and corporate web pages, next most common (although becoming less popular) are –sponsorships

In exchange for sponsorship support, companies are given extensive recognition on the site, such as through integrating the sponsor’s brand with the publisher’s content (as a sort of advertorial, or advertising containing editorial material, e.g., providing tips and tricks on product use) or with banners and buttons on the page. Because of their high cost, sponsorships are most common on sites with high traffic, where the opportunity for exposure is greatest. The big three portals are Yahoo! (where the Movies and Marketplace sections are almost always “sponsored by” a major movie studio and brokerage, respectively), MSN< and AOL. Home page placement on these is getting harder to secure, and orders must be placed months to a year in advance.

There are two types of sponsorships. In regular sponsorships a company pays to sponsor a section of a site, e.g., Clairol sponsors a page on Girls.com; Turbo Tax sponsors a page of Netscape’s financial section. Second is content sponsorship, in which the sponsor not only provides money to associate with a Website but also participates in providing the content.

5. Pop-Ups. These are windows that literally pop up in front of when you in front of a certain site when you access that site or in a new window in front of the site’s window (either while you wait for the page to load or after it has loaded). Their cousins, designed to elude pop-up blockers, are pop-under (pop-behind) ads—ads that appear in a separate window when someone visits a Website and underneath that Website, becoming visible only when a browser is closed. They are usually larger than a banner ad but smaller than a full screen. Sometimes they contain an invitation to visit another related site, in which case the advertiser pays a cost per click (CPC)–the price advertisers pay based on the number of clicks an online ad generates Click-through rates are about 2%, twice as high as that of banner ads.

Unfortunately, pop-ups eat up valuable bandwidth, slowing downloads from the Internet. Also, they are quite obtrusive and hence are considered hated by people even more than banner ads—pop-up ads make Web viewing like swatting flies. Consumers now often use pop-up blockers, and all the major Internet service providers offer pop-up filters, either for a charge or for free. Federal and state legislation now limits such windows when they are triggered by adware and spyware.

Consequently, in late 2002 America Online announced that they were phasing out pop-up ads, they have fallen out of favor, and their future is highly uncertain.

One improvement on traditional pop-up ads are those based on behavioral targeting—a technology that via cookies cookies—small text files that Web servers and ad networks place on users’ hard drives that recognize when Website visitors are seeking a particular product or service and then serves an ad relevant to their search at a later date on another page. For example, a Web surfer could be looking art real estate listings on their daily newspaper site on Monday, and then on Thursday while reading the sports section, would be served an ad from a real-estate agent. Most cookies do not contain personally identifiable data and instead rely on randomly assigned numbers to label Internet users. Advantages are that consumers see more relevant messages, and advertisers get their messages to the right consumers.

Links to corporate Websites then appear when one types in keywords into search engines. If you build a Website without consideration of how it will rank in the major search engines, you have basically built a billboard in the woods. On search engines corporate Website owners can select the terms that are relevant to their site and determine what to pay on a per-click basis for each. The higher they bid, the higher in the search sites their site appears. Firms such as iProspect.com can help you achieve better search engine rankings.

Search-related advertising was pioneered by Overture (now Yahoo Search Marketing), although Google’s dominance as an Internet search engine popularized the technique. Search is now the second-most-used Internet application, with over 40% of consumers using search engines as their No. 1 resource when researching a purchase online. The fast-growing search engine industry (led by Google, Yahoo!, and Microsoft’s MSN) employs spiders—digital robots that crawl through cyberspace, scouring the billions of pages in the Worldwide Web. They catalog all the words in the pages using criteria like how many times they’re viewed, and what other pages they link to.

Given that there are so many Websites out there, attracting visitors to a site is a challenge. When a typical search turns up thousands of results, it makes sense for marketers to make sure that their company’s name pops up near the top of the list because research shows that consumers seldom go beyond the first couple of pages of search results. Smart marketers track their search-engine placement or the percentage of visitors who come to their company’s website from a portal or search engine.

There are three types of search. One is natural search (pure search)—search engines build an index ranking links by relevance on various criteria without accepting payment to be influenced by marketers. Results are ranked by the highest scores against the criteria, with the results fluctuating daily. Marketers do not pay the search engine to try to influence results.

However, marketers can use search engine optimization—manipulating Website content so that search engines display the site in their search results:

(1) The most important criterion for getting to the top of search engine results on Google is collecting links—those little clickable, underlined mentions on websites that take you from one web page to the next. The key is to get other Websites and blogs to link back to yours. Many sites offer “link exchanges” or even links for sale. However, Google weights more heavily more heavily trafficked Websites such as the MySpace online community and Yahoo’s Flickr photo-sharing site. Also, sites with a blog, which gets comments from users, also help you rise to the top. Also, most local chambers of commerce and trade associations have websites and will link to member websites.

(2) A clear website title helps, as does descriptive copy that includes the keywords (search terms). The homepage should have descriptive text about the company and products that gently incorporates the one or two keyword phrases you are concentrating on. (Google offers a free toll for keyword tips at www.adwords.google.com/select/keywordToolExternal

Search engine rankings also can be improved by actions such as changing metatags—hidden descriptive wording in the coding of Web pages that help search engines categorize and index them. Changing title tags—HTML tags used o define the text in the top line a Web browser—the words that appear visibly at the very top of the browser that describe the page you’re viewing, I.e., the title of the document or page at hand—can help too. The value of these tags lies in how descriptive they are. Search engines give the words in title tags a lot of weight in their relevancy ranking formulas.

Website developers design their Web pages with the hope of increasing their sites’ visibility on search engines, a process known as search engine optimization (SEO). SEO involves tapping into the free (unpaid) listings every search engine has, as opposed to sung search marketing to get sponsored links. There are consultants and internet advertising companies such as Weblinx (Weblinx.biz) who help businesses with SEO. For example, a tag for a site on bananas might include such keywords as “banana,” “fruit,’ and potassium” so the site will be listed in search results should someone look up those terms. Specific keywords (e.g., “men’s pants,” not just ‘pants”) work best. Changing page titles, good design (easy to navigate without a lot of fancy things like animation and pull-down menus and frames), adding inner links (linking one page on the site to another page on the site), reciprocal linking to popular sites, descriptive “tags” (Web page titles), and clean URLs (no gibberish, like .com/%20=30.html)can also improve search engine rankings. Consultants can help a marketer to get better search results. Also, marketers can register with various search engines, including Google.com, Yahoo.com, AltaVista.com, and MSN.com to appear as part of their organic listings—free listings.

A second general option is search engine marketing (paid search, sponsored search, search advertising, search marketing, contextual ads)—marketers pay search engines and portals to be included in search index so that their name and a link or a little text ad pops up first or on the top of or to the right side of search results. All major search engines offer ways for Website creators to submit sites for free, but most encourage payments to ensure that an advertiser’s site be listed high in a search engine’s search results. Therefore, to attract customers to her Website, an advertiser (or its online ad buyer such as Doubleclick, aQuantive, 24/7 Real Media, or AdTech) can also purchase from a search engine keywords--words so that the advertiser’s banner, known as a keyword ad, appears whenever users select that keyword for a search. This is known as keyword search advertising or search-based keyword ads. It is also considered contextual advertising—a system through which ads get served up online to an individual viewer of a Web page based on the content the viewer is reading.

Placing ads near search results offers the appeal of all directional advertising—where the consumer is actively searching (e.g., yellow Pages directories, classified newspaper ads, and point-of purchase displays). This is done since most consumers and businesspeople look only at the first few pages of search results. Specialized companies like HighRankings.com can help marketers with their SEO efforts.

There are two methods of sponsored search: paid placement (about 80%) and paid inclusion. Most search engines offer paid placement—advertisers bid against each other (as with eBay) or just pay to be displayed for a key phrase like “sleeping bag.” For example, Google’s advertising program, AdWords, allows companies to buy or bid on keywords such as “blinds” or “wallpaper.” .” Advertisers pay Google only when a user clicks on an ad (from a penny to over a dollar a click). Advertisers can do geo-targeting by zip code and run their ads only during certain time slots. Some crafty companies also buy terms related to rivals.

For example, when a user searched using the keywords “diapers” or “infant care” on portals Lycos or Excite, she was greeted with a Huggies banner ad. This linked to the Huggies Website, which provided tips on baby care, chat with other parents, access to other baby links, and additional information about Huggies products. Many e-tailers customize their landing page—where the searcher is first directed—to a specific keyword.

Google and Yahoo base positioning not just on the highest dollar bids but also on the effectiveness of the ad based on how often the ad is clicked on. Thus, an advertiser who bids less but whose ad is clicked on ore often can get to the top of the search results.

Paid results appear near the unpaid search results. These search-related ads are featured as and marked as “sponsored listings” at the top or side of the search results and are often shaded a different color. Thus, if you type “bird watching” into Google, you find not only the usual motley array of sites but also ads for binoculars, birdhouses, and guidebooks. Most search engines use cost-per-click (CPC) pricing (pay-per-click, per-impression pricing)—for every click on a paid placement listing, the advertiser pays the search engine a fee (from 5 cents to $100 per click, averaging around 50 cents). Others let advertisers pay a flat monthly fee. . For example, Yahoo and America Online charge up to $300,000 for 24 hours. AOL also offers pay-per-call pricing, whereby advertisers pay when prospects call them in responding to their online ads. Ads show up based on both the price an advertiser is willing to pay and the quality of the advertiser’s ad, as determined by an algorithm that considers such things as an ad’s click history and landing page. The higher the quality, the lower the price the advertiser must pay.

To use Google’s search, sign up at adwords.com and set a budget (e.g., $1 a day, $100 a day). Most advertisers find that for every $1 they spend on clicks, they get back at least $5 in revenues. Then, figure out the keywords you want to use—more targeted keywords cost less and are more efficient. Then, bid on a price—the higher you pay, the higher your ranking. Google shows you during the bidding process where you’re likely to land. Finally, write your Google ad. They give you only 25 characters for the headline, which should contain a clear customer benefit (e.g., for water heaters, “Save money and water at home”). The second line of text is for qualifications (e.g., “energy efficient” for the water heater), followed by a call to action (e.g., “25% off through the end of January”).

A second form of sponsored search is paid inclusion—many search engines (including MSN and Lycos but not Google and AOL) accept a fixed fee to guarantee buyers’ sites will appear in search results. However, unlike the clearly marked advertised links of paid placement, these paid inclusions are virtually invisible, simply being mixed in with the unadvertised results. That is, they appear among the search results, looking like any of the other Web links that appear. These camouflaged ads attract far more interest than regular scattershot Internet ads since they give people what they are already looking for.

The ethical issue of deception arises in that purchasing keywords on search engines can compromise the accuracy, objectivity, and relevance of searches. However, defenders of the practice say it provides users with better information and that search results are still displayed in order of relevance, i.e., paid ads get no preferential treatment (an assumption open to dispute). The sponsored links aren’t labeled as such because presumably that would scare away the public from relevant sites.

Purchasing keywords on search engines is crucial, for a Jupiter Research 2001 research study showed that the places consumers go to decide where to shop online were; search engines (72%), online retailer URLs (68%), price comparison sites (25%), product rating sites (16%), merchant rating sites (11%), and other (11%).

Such keyword banner ad sponsorship on major search engines cost $50 to $90+ CPM in 2000 but is now often in the single digits. Search engines charge either a flat monthly fee or a per-impression fee (based on how many people see the ad, or at least have the opportunity to see it). Now, most search engines charge based on click-throughs or cost per-click-when a user actually clicks on an ad banner to visit the advertiser’s home page. Click-through rates are typically 2 to 3 percent. Thus, popular words (more likely to be searched) command higher prices.

When submitting paid inclusion data, companies typically fill out a spreadsheet with information on product details, along with the search words and phrases for which they’d like to appear.

Contacting the numerous sites and negotiating advertising contracts on each one for 2 through 7 would be a nearly impossible task. Thus, most advertisers work through advertising networks or search-advertising providers such as Yahoo Search Marketing Solutions, DoubleClick, ValueClick, and Advertising.com that act as brokers for Websites and advertisers or ad agencies, much like independent media buying services, connecting sites wanting to sell ad space with advertisers and agencies. Ad networks pool hundreds or even thousands of pages together from small websites as well as from the less visited pages of large sites that would otherwise go unsold, and they facilitate advertising across these pages. This allows advertisers to gain wide exposure, including on the smaller sites, and it results in lower CPMs.

Advertising exchanges are ad networks that run auction-style exchanges to facilitate transactions between advertisers and media buyers. DoubleClick, Yahoo, Microsoft, and others run the exchanges, allowing websites to put up ad space for auction. They auction every ad in real-time to the highest bidder. Online ad networks participate in the exchange by putting their publishers' remnant inventory up for sale, and by buying relevant inventory on behalf of their advertisers.

Some marketers appoint in-house search managers to monitor the ad networks and their own agencies since many networks won’t tell advertisers where their ads are appearing since the websites they work with don’t want to drag down the rates of their main pages. Some hire search ad agencies that are dedicated to the complicated and somewhat dry field of search-based advertising, like iProspect in Watertown MA. Some ad networks sell things like text ads, display ads, and video ads.

The problem is monitoring each site for content and traffic. A few Web masters have tried to cheat the system by artificially increasing the number of page requests. Click fraud is also a problem, and it takes three forms (1)—some competitors click on ads just to drive up their rival’s advertising bills, (2) website owners click on ads on their own sites to drive up their advertising revenue, and (3) fraudsters arrange for people to click o ads recycled from Yahoo and Google appearing on small websites. Regarding (3), Google and Yahoo claim they filter out most questionable clicks and either don’t charge for them or reimburse advertisers that have been wrongly billed. However, there are parked websites—sites with little or no content except for lists of Internet ads, often supplied by Google or Yahoo, many of which are the source of click fraud. There also are paid-to-read sites that pay members small payments to visit other websites, often to generate fake clicks on parked websites.

Some unethical webmasters have set up automated clicking models (robotized software) called “Hitbots” or “Clickbots,” which click away all day and cost the advertiser. Web publishers get their friends or pay people to click ads so they can make more money. Academics and consultants estimate that 10-20% of ad clicks are fake. Search engine giants like Yahoo and Google say that’s an exaggeration and that they catch most bad clicks before advertisers are charged and give refunds for illicit clicks.

Search advertising is relatively inexpensive. As noted, the advertiser usually pays on a cost per click basis, which averages about 35 cents per click (vs. $1-per-lead average for yellow pages). Click-through rates are typically 2 to 3 percent. The money is split between the portal that generates the traffic (e.g., Yahoo, MSN, and America Online) and the search-adverting provider (e.g., Yahoo Search Marketing Solutions, with the search engine pocket about two-thirds and the search-advertising provider getting one-third.

One advantage of paid search is that advertisers can easily collect information on consumer online behavior—it is measurable. Another advantage of paid search is that the ads are targeted to people who are actively looking to buy solutions to problems. Therefore, readers don’t consider it intrusive. Consequently, Google click-through rates are a bit over 5%, compared with rates of .2% for online ads in general. And, advertisers can easily collect information on consumer online behavior.

Most search engines now also offer free e-mail services, such as Microsoft’s Hotmail, Yahoo, and Google’s Gmail. All of these serve up ads. Google’s computers automatically scan the body of messages for keywords used to tailor the ads. Then sponsored ads and (unpaid) related links are displayed in the right-hand margin of the screen (just as they are on Google’s search pages).

Google also has a program, originally created as a bonus program for advertisers who use Google AdWords (which puts sponsored ads at the top of search results at Google’s own site), but now available to anyone with a website or blog, called AdSense. Through AdSense, Google clients get to tout their wares beyond Google’s home page on thousands of partner websites and blogs maintained by small businesses and bloggers representing 80% of the Web. To participate, site owners sign up at Google.com/adsense, which reviews the site. Once a small piece of computer code language is implanted on an accepted site, Google matches ad links from its warehouse of clients to appropriate sites. Each site contains Ads by Google links. Publishers split revenue with Google. Google has two places for publishers to create sites for free: pages.google.com and Blogger.com. During the site creation process, Google asks if the publisher would like to add Google ads (AdSense) to the site and offers a form to fill out.