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Is The Rise Of Online Sales Due To Contextual Advertising?



Is The Rise Of Online Sales Due To Contextual Advertising?

Many people are wondering what has caused online sales to increase. Many would guess that it has something to do with advertising. These people would be considered to be only partially right, because online sales have increased due to online advertising.

More specifically, increases in online sales are directly related to contextual advertising. Contextual advertising is deemed effective because the ads are delivered based on the content of the website using an automated system (PowerHomeBiz News, Nach Maravilla, July 2004). For example, a page on hockey will display ads on hockey teams; or a page on business will show ads supporting various business ideas.

In today’s market, contextual advertising has become an essential device to effectively attract customers online. Contextual advertising is extremely different from those of the past, it supplies online marketers with a truly efficient, metric driven, return on investment (Webpronews.com, Anand Subramanian, August 2005).

The final outcome for advertisers and publishers is a higher click through rate that generates an increase in sales and profit. With the emergence of Google's AdWords and Clicksor, the business of contextual pay-per-click banners has exploded. (Cyberindian.com, Mike Banks Valentine, January 2006) This media offers the breathtaking combination of easy use and payouts for each and every click. It's no wonder this media is so popular with the likes of Slashdot, which shows PPC marketplace links on the right-hand side of the site's main categories and posts, and Go.com, which uses Yahoo Search Sponsored Results to power its search function (Cyberindian.com, Mike Banks Valentine, January 2006). Businesses that don’t grasp the benefits connected to this type of marketing and don’t incorporate it into their advertising and customer acquisition strategies will be left in the competitions dust (Webpronews.com, Anand Subramanian, August 2005).

Internet spending hit $143.2 billion for 2005 which was a 22% increase over 2004 spending of $117.2 billion (ClickZstats, Enid Burns, January 2006). Of the total online spending, $82.3 billion was spent on non-travel retail and $60.9 billion was spent on travel. (ClickZstats, Enid Burns, January 2006).

Among individual e-commerce sites that utilize contextual advertising techniques, eBags.com, an online retailer of bags and shoes, reported record holiday sales, with an increase of 42 percent over the 2004 season (CnetNews.com, Elinor Mills, December 2005). In addition, in the week ended Dec. 11, 2005 online sales passed the $3 billion mark for the first time (MarketingVOX News, January 2006). In the week ended Dec.18, online sales have increased 29 percent to 3.03 billion from $2.35 billion in 2004. (MarketingVOX News, January 2006).

During this holiday season, contextual ad user Amazon.com reached its best holiday sales season ever. Amazon sold more than 108 million items from Nov.1 through Dec.21. Amazon amazing sales was mainly due to Apple Computer's iPod music player; which occupied the top three online sales spots in electronics--the 2GB Nano, in black; the 30GB video iPod, also in black; and the 512MB Shuffle (CnetNews.com, Elinor Mills, December 2005).

Potentially, contextual ads are as large as the web itself. Google, Clicksor, and Yahoo are all going to be networks that advertisers and publishers will be hunting for, in order to boost up their online sales and profits.

Contextual advertising can be said to be the number one source that has caused online sales to boom. The reason contextual advertising has increased online sales dramatically, is because people viewing your website already pre-qualified themselves as someone interested in what you offer. You receive a higher quality, targeted visitor to your site. That translates into a higher conversion rate and an increase in profits for advertisers and publishers. (WorkZ News, Tina Valiedi, July 2005)

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Source:
(ClickZstats, Enid Burns, January 2006) URL: http://www.clickz.com/stats/sectors/retailing/article.php/3575456

(CnetNews.com, Elinor Mills, December 2005) URL:http://news.com.com/Online+retailers+report+record+holiday+sales/2100-1038_3-6010133.html

(Cyberindian.com, Mike Banks Valentine, January 2006) URL:http://www.cyberindian.com/web-marketing/how-to-qualify-for-google adsense.php

(MarketWatch News, Bambi Francisco, January 2006) URL:http://www.marketwatch.com/news/story.asp?page=1&guid=
{7AE0925D-3006-4152-AD6B-4F43A5AFD1A3}&siteid=mktw

(MarketingVOX News, January 2006)
URL: http://www.marketingvox.com/archives/2006/01/05/online sales_surpass_3_billionmark_for_week/index.php)

(PowerHomeBiz News, Nach Maravilla, January 2006) URL: http://www.powerhomebiz.com/vol139/contextual.htm

(WorkZ News, Tina Valiedi, July 2005)
URL: http://www.workz.com/content/view_content.html?section id=517&content_id=6868

(Webpronews, Anand Subramanian, August 2005)
URL:http://www.webpronews.com/enterprise/marketing/wpn-16-20050819Ad


About the Author

Yesup Ecommerce Solutions Inc.
330 Highway 7, East, Suite 202
Richmond Hill, Ontario, L4B 3P8
E-Mail: info@yesup.com
URL: www.yesup.net
905-763-9735


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