Tags: There is an article about banner advertising in Ars Technica which describes the value of advertising regardless if there is an immediate response (e.g. a click).
Online advertising can roughly be broken down into performance advertising and brand advertising. Performance advertising is what most websites have exposure to - advertising where the website gets paid if a user clicks on an ad (CPC), purchases something from the advertiser (CPA), or gives something (their data) to the advertiser (CPL). Google Adsense, as well as affiliate programs like Tradedoubler and Commission Junction are forms of performance advertising.
Most sites have exposure to performance advertising - they only get paid on a user action, and the do not get paid because the user noticed their ad, without taking immediate action. This means that advertisers get their brand onto websites for free - and that publishers did not get compensated for the brand advertising.
Most brand advertisers stick to the largest of sites. For example, in the UK, auto companies pay lots of money to be associated with Top Gear, an automotive site which is part of the commercial arm of the BBC. These advertisers pay on a CPM (cost per 1000 banner impressions) basis, so regardless of whether a user clicks on a banner, Top Gear will still get paid. If you look at one of their automobile reviews, you can see that the advertising is entirely brand based. At the time of this blog entry, it looks like Jaguar advertising has taken over the review for a BMW automobile site. This is incredibly valuable inventory for Jaguar - not because of the people who click on their ads, but because of everyone who, subliminally or otherwise, notices Jaguar right next to BMW.
It is great to see that there is more thought going in to the brand side of advertising. I am sure that brand advertisers will make their way from offline media to online in a big way over the next few years. I look forward to it - and hope that this benefits the Openads community as much as I think that it will.
