What is Online Advertising?
Advertising refers to non-personal communication activities for the presentation or promotion of ideas, goods or services that are paid by an identified sponsor also called as “advertiser”. Online advertising, PR and sales promotion are the main tools of marketing promotion function and digital marketing. The basic purpose of advertising is to influence the customers’ perception and encourage them to buy the advertiser’s product instead of competitors.
On the other hand, companies do not pay media to broadcast or print their advertisements to enhance the Public Relation with customers. However, they provide information to media or customers to pick it up in their coverage or conversations. So main goal of Public Relation is to create good relationships with stakeholders through a positive image.
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| Online Advertising is the main tool of Digital Marketing promotion. (Photo by William Iven) |
Online advertising has grown its importance during the last several years. Today almost all firms are increasingly shifting their marketing budgets to digital channels due to change in consumer’s behavior for in terms of media usage and purchase behavior. During the past 10 years, net spending on online advertising has significantly increased. The advertising through the internet or digital channels can be highly effective for businesses and its outcomes can be easily attributed to campaigns, resulting in a high accountability.
Advertising Channels (Forms)
Like as different types of online marketing, online advertising is still in growing field of development, even the term “form” itself is not clearly defined. According to marketing scholars, the activities belonging to online advertising must meet the following criteria:
§ Paid by the advertiser.
§ Non-personal communication.
§ Presentation of promotion of ideas, goods, or services.
§ The advertiser can be identified as a sponsor.
There are different forms or channels of Advertising and Sales Promotion out of which major forms are:
Online Public Relation
The main purpose of Public Relations is to establish good relations with the general public and make them the customers of the company through good publicity, building up the corporate image, creating favorable rumors, stories or events. As earlier stated, PR is different from Advertising as companies do not pay media for advertising their messages. The objective of online PR is to stimulate the number of references in favor of the company or its brands on third-party websites. According to Kotler et al. (2008), the major advantages of (online) PR over advertising are the higher reach, lower cost, and better quality of contacts, resulting in a greater message credibility.
Advertising Strategies
While establishing advertising strategies, companies must consider the two major elements: creating persuasive advertising messages and selecting advertising media. In the past, companies often considered media planning as secondary to message creation process. One department of the company created good advertisements and the other department selected the best media for carrying these advertisements to target consumers. This often created conflicts between creative and media planning departments. Today, the effective marketing strategies such as media fragmentation, soaring media costs, and more-focused target marketing have increased the importance of media planning function. Today’s highly competitive and digital marketing environment forces management to think first about media planning than message creation.
Sales Promotion Strategies
Sales promotion is often considered good promotion tool and it works closely with the advertising. Sales Promotion is a short-term incentive to boost up the purchase or sales of a product or service. Advertising offers the reason and inspires consumers to buy the product or service, whereas Sales Promotion inspires consumers to buy the product now.
Sales Promotion is found everywhere for example, a customer buys a Sony Laptop and gets a free carrying case, an e-mail from Amazon.com offers free shipping on next purchase over $35, A hardware store chain receives a 10 percent discounts on selected Black & Decker portable power tools if it agrees to advertise them in local newspapers.
Major Sales Promotion Tools
Today, most organizations including manufacturers, distributors, retailers and non-profit institutions use sales promotion tools. These tools are used by product managers to increase their current sales due to high competition, less product differentiation, and declining advertising efficiency because of rising costs. Major sales promotion tools are mentioned below:
Consumer Promotion Tools
The consumer promotion tools are utilized by product managers to draw in the potential customers and buyers. Such tools comprising the coupons, premiums, money refunds, advertising specialties, point-of-purchase displays, and contests etc.
Trade Promotion Tools
Trade promotion tools are used by the manufacturers for retailers, wholesalers or re-sellers to persuade them to carry a brand, provide it shelf space, promote the brand through advertising and deliver it to the consumers. The main trade promotion tools are discount and allowance. Discount is a reduction in price on the purchase during a stated period of time. It is also called price off, off-invoice, or off-list. An allowance is a cash prize or promotional money that is paid by the producers to the retailers in return for an agreement to feature the products of a producer in some way.
Business Promotion Tools
Business promotion tools are used by companies spending billions of dollars each year to promote industrial customers. These tools are used to produce business leads, boost up purchases, reward customers and motivate sales-force. Many tools used for consumer or trade promotions are also used in business promotion. Additionally, two main business promotion tools are conventions and trade shows, and sales contests.
Many companies or associations arrange conventions and trade shows to promote their products. These shows help companies to reach and inspire many prospects that are beyond the reach of sales-force. Sales contest is a challenge for the sales-force or dealers to motivate them to increase their sales performance during a specific period of time. Sales contests encourage good company performers who in return may receive trips, cash prizes, the point of performance reward, or other gifts.
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