04 march 2020 0 comments

The History and Evolution of Internet Marketing

Affiliate marketing is a specialized niche in online advertising. And here lies the paradox: we have a general idea of how affiliate marketing originated and evolved, but we know practically nothing about the history of Internet marketing. So, let’s take a brief look at the stages online advertising went through in its development. Some of you will find yourselves reminiscing about the good old days when reading this article, while some will learn something new.


1985-1994 The advent of online advertising in the early days of the Internet

 
 

1994 The first clickable web-ad banner

1998-2000 The first search engine powered by advertising. The launch of Google AdWords

 
 

2004 The year when the first Facebook ad was launched

2007 DSPs are growing in popularity

 
 

2011 Native advertising

2014 Automated ad systems hit the market

 
 

2018-present Push notifications as a new ad format

1985-1994

The advent of online advertising dates back to the early days of the Internet. The first digital ads were basically plain text email messages. There were no spam filters back then, which prompted the so-called golden age of web spamming when everyone could make a fortune in no time. So, please, stop saying that digital advertising peaked in 2014.

The first unsolicited bulk email was sent by Gary Thuerk, a Digital Equipment Corp marketer, to 400 ARPANET (the precursor of the Internet) addresses on May 3, 1978. The message was advertising product presentations for a new model of a DECSYSTEM-20 computer. Here’s is what it looked like:

1994

The year saw the first clickable web-ad banner going live. The banner was placed by AT&T on HotWired and read “Have you ever clicked your mouse right here? You will!” The ad enjoyed a click-through rate of a stunning 44%.

These events were followed by HotWired placing a couple of other banners from the likes of MCI and Volvo. The funny fact is that these brands didn’t even know that they were promoted on the web, as banners were provided as a supplement to offline advertising. 

Most companies didn’t show any interest in web-ad banners for quite a while, although the CTR back then could reach an impressive 78% (even 1% is considered a good result today).

1998-2000

In 1997, Bill Gross, an American entrepreneur, came up with an idea of selling links in search results to advertisers. In June 1998, he launched a project called overture.com which was basically a search engine powered by advertising. Sponsored links were shown at the top of the page before organic results. Needless to say, the idea became so popular that all existing search engines soon decided to copy it. By the way, Overture was acquired by Yahoo in 2003.

2000 saw the launch of Google AdWords that hit nearly $85 million in revenue in 2001.

2004

Maybe we shouldn’t have defined this year as a separate stage in the development of Internet marketing, but we believe that affiliates also deserve due respect. After all, this is the year when the first Facebook ad was launched.

Facebook initially offered only two banner types. Back then, marketers could only buy ads targeted at all Facebook users. This is what Facebook’s first ads looked like:

It may sound ridiculous now, but throughout the entire 2004 Mark Zuckerberg was very skeptical about advertising on Facebook and even had little captions put above the display ads reading “We don’t like these either but they pay the bills.” 

By 2005, though, he seemed to have changed his mind as Facebook began developing its own in-house ad sales department. Kevin Colleran, Facebook’s first ad salesperson, claims that Facebook wasn’t picky about ads back in those days. There was no review process in place other than standard content and grammar check. Later on, when it became clear that selling ad space could be immensely profitable, Facebook started introducing stricter ad rules that were getting harsher with each passing year. We all know perfectly well what Facebook’s ad guidelines look like now.

“I don’t hate all advertising. I just hate advertising that stinks.”

Mark Zuckerberg

2007

The year saw the advent of demand-side platforms (DSPs). DSPs are real-time bidding networks that allow advertisers to buy and manage digital ad inventory. Whereas previously brands used to purchase ad inventory only, marketing automation platforms helped them to segment customers and reach their ideal audience. 

DSP companies started to emerge later on, and some of them still dominate the market. The major DSP technology vendors include the likes of AppNexus (25 billion impressions a month), Invite Media (10 billion impressions a month), and MediaMath (10 billion impressions a month).

DSPs are tapping on the RTB (real-time bidding) protocol to dynamically exchange user behavior data. With real-time bidding, advertisers bid on an impression and set how much they are ready to pay for the customer. Once the user hits the website, the auction is launched. If the bid is won, the advertiser’s ad is instantly delivered to the user. This whole process takes moments while the site is being downloaded.

The first DSP service was launched in the US in 2008 and looked really promising. All the first RTB exchange platforms were bought up by Google.

2011

The term “native advertising” was first coined by Fred Wilson at the Online Media, Marketing, and Advertising Conference in 2011.

Native ads are “unique and native to the experience” of the site. The objective of these ads is to increase the click-through rate, sales, and target actions.

Native ads can take the form of text ads, videos, and audio recordings. Their distinctive feature is that they are not subject to banner blindness and match the look, feel, and function of the website.

Here are some examples of native ads:

An article on the future of online shopping on the New York Times website. The article does not promote any product or service and deals with how virtual reality can change the way you shop online.

The Patrón Tequila manufacturer used hashtag #MargaritaOfTheYear and posted 7 new cocktail recipes asking the users to choose the best contender.

Native advertising is now used by a slew of major global brands, and this tendency continues to gain momentum.

2014

After a while, ad networks began thinking about developing an algorithm that would enable advertisers to save on their ad budget. The networks set themselves the goal to come up with a solution that would make the most out of each invested dollar and bring businesses to the next level. This is how automated ad systems were born.

Automated ad platforms allowed advertisers to control the process of buying and receiving traffic from multiple sources taking into account the following parameters: conversion rate, the price per conversion, the price per click, target actions. It also enabled buyers of digital ads to change the bid when a specific result was achieved.

One of those automated systems was called programmatic advertising.

     
  Programmatic advertising is a process of buying, selling, and publishing ads based on complex algorithms.  
     

Programmatic is a special case of RTB advertising.

2018 – present

The beginning of 2018 was marked by the introduction of a new ad format called push notifications. The push notification technology had a long and ramified history, though. As far back as in 1990, PointCast Network delivered stock market data through the push channel. 

Up until 2018, push notifications were used by media corporations and major brands to promote their products. Finally, in 2018, it became possible for advertisers to buy push notification traffic ads. Push advertising peaked in 2019, while in 2020 the push trend is on the wane.

It won’t come as a surprise if we say that digital advertising continues to grow and develop to this day. PPC ad testing has now become a key component of many online marketing campaigns and generates one of the best results in the market. PPC ads are followed by social media and social ads in terms of efficiency. 

Currently, the main venues of Internet marketing development include:

  • automated ad publishing;
  • easy universally available attribution; 
  • omnichannel optimization.

The digital market has been rapidly developing in recent times with the advent of new technology such as chatbots, VR environment, voice search, AI, and machine learning. Marketers at major companies often fail to keep up with this pace and tap into all available ad channels, favoring more traditional ad formats.

Conclusions

We have put a lot of thought into coming up with a conclusion. The reality is though that we probably don’t need any, as all of us are working in the digital industry and always keep an eye on each stage of online marketing development in order to keep up with the race.


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