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3.1 Introduction

Simply put, online advertising is advertising on the Internet. Online advertising encompasses advertisements on search engine results pages, advertisements placed in e-mails, and other ways in which advertisers use the Internet. However, this chapter focuses on display advertising or rich-media advertising.

Whether online or off, the main objective of advertising is to increase sales. Advertising also aims to increase brand awareness. Advertising is based on the simple economics of supply and demand. Advertisers aim to stimulate a consumer need and then satisfy that need.

One of the greatest benefits of online display advertising is that the messages are not restricted by geography or time. Online advertisements are also much more interactive than offline advertising. While both online and offline advertising can be disruptive, interactive online advertising can be designed to be perceived as less so.

Online display advertising began as simple hyperlinked images shown on a Web site and has since progressed to include video, sound, and many other modern technologies. Today, messages and interactions can be contained within the advertising display without ever taking consumers to a landing page.

Although the Internet provides new scope for creative approaches to advertising, we see its true advantage when we realize how trackable, and therefore measurable, Internet advertising is. Or, to take it from Eric Schmidt, CEO of Google, “The Internet will transform advertising because of its trackability, not its beauty.”Rebecca Lieb, “Immersive Advertising (Three Days’ Worth),” ClickZ, October 25, 2002, (accessed May 1, 2008).


Online advertising rapidly followed the developing Internet. And, as consumers are increasingly spending more time online, and hours spent on the Internet start to eclipse hours spent watching television, the medium becomes increasingly important to any advertiser.

According to Wikipedia, the first clickable banner advertisement was sold to a law firm in 1993 by Global Network Navigator. HotWired, an early Web magazine, was the first to sell advertising space in large quantities to a number of advertisers. One of the very first advertisers was AT&T (a U.S. telecom company), which went online in October 1994.Wikipedia, s.v. “Web Banner,” (accessed May 7, 2010).

Figure 3.1 An Early Banner Ad for AT&T

This was part of a campaign that AT&T was running to promote the Internet to consumers, and included television and outdoor advertising. Believe it or not, but this was cutting edge back in 1994!

As Web technology has developed, so has the technology that is used to create and serve advertising online.