M. G. Blazhina
Chief of the Foreign languages
Chief of the Department of Moscow
Business Academy in Association with
the Government of Moscow
Camacho Chavarria M. D.
Magister of Economy
Consul of the Embassy of Costa Rica
in Russian Federation
Advertisement in E-Commerce


This article is devoted to the problem of promotion of advertising product used in E-Commerce.

The article analyses different types of banners and finishing with chat-rooms. The article also studies how it is possible to appreciate the effectiveness and pricing of advertisement and how to calculate advertising costs and stated tariffs.

Advertising method I used to promote products at the market. The article pays attention to the advantages which the Web provides with and consumers tremendous service by giving them a lot of free information that helps to make correct and rapid decisions.

Keywords: advertisement, promotion, banner, consumer, pricing, Interactive.

Advertisement is an attempt to disseminate Information in order to affect a buyer-seller transaction. In the tradition sense, advertisement was impersonal, one-way mass communication, which was paid for by sponsors. Telemarketing and direct mail were attempts to personalize advertisement in order to make it more effective. These direct marketing approaches worked fairly well but were expensive and slow.

One of the problems with direct mail advertising was that the advertisers knew very little about the recipients. Segmentation helped a bit, but did not solve the problem. The Internet redefined the meaning of advertisement. The Internet has enabled advertisers to learn about customers and to interact directly with them. In interactive marketing, a customer can click on an ad for more information or send an e-mail to ask a question. The Internet has provided sponsors with two-way communication and e-mail capabilities, as well as allowing them to target specific groups on which they want to spend their advertising dollars. Finally, the v enables a truly one-to-one advertisement.

Brock-and-mortar companies use Internet advertisements as one their advertisement channels; at the same time virtual companies may use TV, newspapers, or other resources as advertisement channels.

In this article we will show how the advertisement part of interactive marketing is implemented online.

Banner advertising is the most commonly used form of advertising on the Internet.

As you serf your way through the Web, banners are everywhere. Typically, a banner contains a short text or graphical message to promote a product. Advertisers go to great lengths to design a banner that catches consumers attention. Banners with video clips and sounds are also common. Banner contain links that, when clicked on, transfer the customer to the advertisers home page or another page the advertising wishers to target.

The major benefit of banner ads is that, by clicking on them, users are directly transferred to the shopping page of an advertisers site. Another advantage of using banners is the ability to customize them to the target audience. At a minimum, an advertiser can decide which market segments to focus on. Also, forced advertising marketing strategy is utilized with banners, which means customers are forced to see banner ads before they can get free information or entertainment they like to see.

When several Web sites are interested in banner swapping, a multicompany match may be easier to arrange.

Banner exchange organizers arrange for trading among three or more partners. It works similarly to an off-line bartering exchange. A firm, which is willing to display others banners, joins the exchange. Each time a participant displays a banner for one of the other exchange members, it receives a credit.

On February 26, 2001, the Internet Advertising Bureau, the industry trade group, adopted five standard advertising sizes for the Internet. These ads are larger and more noticeable than banner ads. Therefore, in preliminary tests, it was found that users read these ads four times as frequently.

A popular way to advertise on the Internet is send company information to people or companies listed in mailing lists. E-Mail messages may be combined with brief audio or video clips promoting a product with on-screen links that users can click on to buy. The advantages of e-mail approach are its low cost and the ability to reach a wide variety of targeted audiences. Most companies have a database of customers to which they can then send e-mail messages.

E-Mail is emerging as a marketing channel that affords cost-effective implementation and better, quicker response rates than other advertising channels. Therefore, marketers are embracing this medium. Furthermore, it is an interactive medium and it can combine advertising and customer service. What happens, though, when every marketer starts inundating prospects and customers with e-mail? How much e-mail will result? How will consumers deal with it? What areas must marketers focus on to ensure e-mail marketing success?

Undoubtedly, the quantity of e-mail that consumers receive is exploding.

This is especially important as even now nearly one-third of customers read e-mail only from senders with whom they have a relationship. As the volume of e-mail increases, customers tendency to screen messages will rise as well.

When considering who they should target, marketers must supplement existing database information with data relevant to e-mail campaigns. When deciding what to include in an e-mail, marketers must integrate inbound customers service e-mail solutions with their outbound marketing efforts. Finally, with regard to the how, or execution, of the message, marketers must develop e-mail- specific copy writing skills and the ability to deliver multimedia rich e-mail.

Mobile phones offer advertisers a real chance to advertise interactively and on a one-to-one basis with consumers. In the future, ads will be targeted not only to individuals based on their user profiles, but also based on their situation at a particular point in time, such as where an individual is located or what the weather is a certain area.

Electronic chat refers to an arrangement where multiple participants exchange messages over the Internet in real-time. The software industry estimates that several hundred thousand Web sites have millions of chat rooms.

A chat room is a virtual meeting ground where groups of regulars come to gab. The chat rooms can be used to build a community, to promote a political or environmental cause, to support people with medical problems, or to let hobbyists share their interest. And since customer - suppler relationships need to be sustained without face-to-face meetings, including advertising.

Vendors frequently sponsor chat rooms. Chat capabilities may be added to a business simply places a chat link on its site and the vendor does the rest, including the advertising that pays for the session. The advertisement in a chat room merges with the activity in the room and the user is conscious of what is being presented.

The main difference between an advertisement that appears on a static Web page and one that comes though a chat room is that the latter allows advertisers to cycle though messages and target the chatters again and again. Also, advertising can become more thematic. An advertiser can start with one message and build upon it to a climax, just as an author does with a good story. Chatters are used to seeing multiple ads on their screens, so they are bound to take notice.

Online advertisement can be done in several other ways ranging from advertisement in newsgroup to the use of kiosk. Advertisement on Internet radio is just beginning, and soon advertising on Internet television will commence.

There are also ads that link users to others sites that might be of interest to a type of community member. Targeted ads can also go to the members portals. Finally, the domain name itself can be used for brand recognition. This is why some companies are willing to pay millions of dollars for certain domain names.

Effectiveness and Pricing of Advertisement

Justifying Internet advertisement is more difficult than doing so for conventional advertisements. One of the major reasons for this is difficulty in measuring the effectiveness of online advertising and disagreements on pricing strategies. Several methods are available for measuring advertisement effectiveness, conducting cost benefit analyses, and for pricing ads. Four representative methods are discussed here.

Traditional ad pricing has been based exposure or circulation. So far, this model has been the standard advertising rite-pricing tool for Web sites as well, usually using ad views to measuring circulation. While exposure charges on the Web very widely, on average they have been at higher levels than they are in most other media because of the small supply of highly trafficked Web sites.

Since advertisers pay an agreed upon multiple of the number of guaranteed ad views, it is very important that ad views are measured accurately in the context of the advertising business model. This limits the sites responsibility for ad delivery, and the ad revenue generated to the spices seller is simply the product of the traffic volume times a multiple, which is generally priced in terms of CPM, which can range from $10 to $700. The price charged is different for some portals and other popular sites.

The wide price spread suggests that the Web can function both as a mass medium and a direct-marketing vehicle and that context, audience, technology, and anticipated results all play a part in determining what price an advertiser will pay. A few well-branded portals in a very broad range of categories will dominate, and these portals will be able to charge a premium for ad space.

Some companies, such as USA Today, charge their clients according to the number of hits. As explained earlier, there may be several hits in one as view.

Ad pricing based upon click-through is an attempt to develop a more accountable way of charging for Web advertising. The payment for banner ad is based on the number of times visitors actually click on it. However, a relatively small proportion of those exposed to a banner ad actually click on the banner, about 1 to 3 percent of viewers. Thus, payment based upon click-through guarantees not only that the visitor was exposed to the banner ad, but also actively decided to click on the banner and become exposed to the target ad. Spice providers usually object to this method, claiming that viewing an ad itself may lead to a purchase later or to an off-line purchase, much as newspaper or TV ads do. On the other hand, advertisers do not like to pay for ad views and prefer the click-through method. Only large advertisers such as Procter and Gamble can pressure space sellers to accept click-through payment methods, or even batter - interactivity.

This measure was initially proposed in 2000. While a payment based upon click-through guarantees exposure to target ads, it does not guarantee that the visitor liked the ad or even spent any substantial time viewing it. The interactivity model suggests basing ad pricing on how the visitor interacts with the target ad. Such an interactivity measure could be based upon the duration for time spent viewing the ad, the number of pages of the target ad accessed, the number of additional clicks generated, or the number of repeat visits to the target ad. Obviously, this method is more complex to administer than the previous methods.

Modern Media, an interactive advertising agency, had developed a pricing model in which its clients paid not for exposures or click-through, but only for activity at the clients Web site. This has raised a controversy surrounding Web media. Web publishers argued that the problem with activity-based measures like click-through or interactivity is that the Web publishers cannot be held responsible for activity related to an advertisement. They also argued that traditional media, such as newspapers or television, charge for ads whether or not they lead to sales. So why should the interactive condition be applied on the Net?

Advertisers and their agencies, on the other hand, argued that since the Web medium allows for accountability, models can and should be developed that measure actual consumers activities. A standard solution may eventually be developed in the future or different approaches will used by different companies.

Other methods can be used to pay for ads. For example, some space providers charge a fixed monthly fee to host a banner, regardless of the traffic.

Other use a hybrid approach, a combination of some of the previous methods.

Web advertisement attempts to attract surfers to advertisers sites where they receive lots of information, interact with the sellers, and in many cases place an order.

Web promotions are similar to off-line promotions.