Internet marketing is active not passive Broadcast versus Targeted Advertising

In general, sellers want to send advertisements only to potential buyers. For products that most consumers purchase on a regular basis, such as toothpaste, soap, and so forth, there is little concern about waste in using mass market advertising. Although the broadcast media is well-suited for such consumption goods, a seller of a product with limited buyer appeal needs to focus its advertising more narrowly, using special interest magazines, for example.

Advertisers have honed a wide array of techniques to focus their advertising most efficiently. Advertisers, for example, have refined their techniques for focusing by using demographics data and readership profiles. Because the Internet is capable of supporting very small special interest groups, which cannot be efficiently supported through magazines, and so forth, the Internet offers even more focused venues for targeted advertising. Furthermore, advertisers can latch on to keywords supplied by consumers to present a focused advertisement (see figs. 6.7 and 6.8). When a user searches for something about books, an advertisement for a bookstore appears on the web page; when the search is related to music, the search service presents an advertisement for a music store. The more advertisers there are, the more precise the match between the keywords and the advertisement will become.

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Figure 6.7 The search result presented by Lycos (http://lycos.cs.cmu.edu) when the search keywords were "novel book historical FAQ." A banner ad for an Internet bookstore appears.

Figure 6.8 The search result presented by Lycos (http://lycos.cs.cmu.edu) when the search keywords were "Patsy Cline song." A banner ad for an Internet music store appears.

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Targeting advertisements in this way is assumed to increase effectiveness. In one way or another, marketing professionals are trying to learn and incorporate consumer preferences in their product development and marketing plans. Once marketers learn who wants what products through market surveys, focus groups, and test marketing, they target the consumer groups who match the demographics. On the Internet, consumers often reveal their preferences by visiting a specific web site. Someone who visits GolfWeb (http://www. golfweb.com) will more likely be a golfer; a visitor to an automobile review site may be thinking about buying a car. Because of the presumed effectiveness of targeted advertisements, web pages command a high price for advertisements. GolfWeb, for example, earns between $30 to $40 per 1,000 impressions (that is, 1,000 times an ad is viewed). Some popular computer-related sites command twice that much for the same number of impressions.

The difference between audience targeting in the broadcast media and on the Internet is clearly a matter of degree. Although the Internet allows a more precise targeting than the broadcast media, its advantage over traditional broadcasting media is still only incremental. Although it is often termed as "narrow-casting," the Internet advertising being promoted today as a winning strategy is still based on a model of broadcasting.

However well-targeted, this type of advertising is still intrusive to consumers who prefer to be left alone. The underlying principle in this type of advertising is one-way communication from sellers to buyers, as in physical markets. In contrast, the Internet is a two-way communication medium where consumers actively seek out information about products. Therefore, in the case of the electronic marketplace, the objective of advertising should change from sending product information to buyers to an interactive conversation between sellers and buyers to match the consumption needs with the products. Internet advertising is, in fact, "needs-based advertising;" consumers request an advertisement when it is needed. Even if a reader remembers a particular ad in a newspaper, she may have difficulty recalling or finding the ad when she really needs it. On the Internet, when you want to buy a product, you can search for the ads on the fly.

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