One of the ways that advertising works online is as follows.
* Advertiser A wants to Advertise online and reach consumers while on the web.
Site B has Advertising "space" to sell, (banners,buttons,) - these are called IMPRESSIONS.
A contract or IO is issued, and a deal is arranged based on 3 typical metrics.
CPM - Cost per thousand of impressions (high risk advertiser, low risk site)
CPC - Cost Per Click - or each time a consumers CLICKS on the banner, the advertiser pays the site (shared risk)
CPA - Cost Per Acquisition - or each time the Advertiser generates a SALE, Lead, (from the site's efforts at showing impressions) or desired action, the Advertiser has ZERO RISK in this model, and pays the site only when a acquistion is generated. (high risk site, low to ZERO risk advertiser)
This is a typical example of how 80% of the internet marketing world has WORKED UP UNTIL the end of 2005.
Today, a new and interesting dynamic is being tested, and ultimately rolled out.
Remember how advertisers bought impressions in the model above?
How about if the Advertiser could buy COOKIES? Buy and pay for the SITE TRAFFIC...to be able to cookie the consumers visiting the sit..and NOT buy Advertising, as the model above described.
Meaning, Advertiser A can now say to the site.
"I do not want to buy your impressions, but rather, I'd like to "cookie or tag" your users, and traffic to your site, and PAY YOU A CPM for that."
Think about it.
The Advertiser can then create segments based on WHO ALLOWS THIS type of "audience segmentation.."
Thus, a large advertiser can quickly have the ability to use those cookies to target much more efficiently. The advertiser can "anonomously" identify, users when they see them on ANY OF THEIR MEDIA BUYS..(when they buy impressions in the original example described above) -- and show them HIGHLY TARGETED AD's, based on their previous behavior.
Strong, and compelling -- as you can see, with this type of efficiency, the market is moving.
But, watch out.
Small companies out there, filed VERY SPECIFIC - "patent's, around intellectual property" --, six and seven years ago, around THIS VERY TYPE OF TARGETING...(paying sites for cookies, and using those "idenitifiers" to target more efficiently..")
The internet is still a bit like the WILD WEST...but when it comes to Internet Advertising, and it's future, you can expect some HUGE happenings, as the market matures...and the table is set, for the technology, to DRIVE the targeting needle.
Major changes are in progress, from a legal, IP, targeting and consumer perspective. I predict the next 120 days you will see some landmark changes in the advertising space, as it relates to "targeting, and advertising online..."