With the rapid growth of the Internet and its audience advertisers now have a new medium at their disposal. The placement of the first banner ads in 1994 marks the birth of Internet advertising. Although the advertising industry at first hesitated to adopt the new medium, two facts brushed away their doubts:
Migrating Television Audiences: The increased use of the Internet led people to redistribute their time budget. Whereas some cut down on eating and sleeping, more than a third reduced watching television and instead uses the WWW.
Interesting Internet Demographics: While methodologies and approaches of research organizations studying the demographic composition of the Internet vary, the findings are relatively consistent: Internet users are young, well educated and earn high incomes.
Considering those findings, the Internet in the first place seems to become inevitable to be included in media planning, as part of the audience shifts from TV to the WWW, and secondly, because demographics of the Internet user population are irresistible for marketers.
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Media systems (especially broadcasting) can be classified in two different types:
Public Media Systems: Government control over broadcasting through ownership, regulation, and partial funding of public broadcasting services.
Private Media System: Ownership and control lies in the hands of private companies and shareholders.
Both systems can exist in various forms, according to the degree of control by governments and private companies, with mixed systems (public and private) as the third main kind.
Whereas public media systems are usually at least partially funded by governments, private broadcasting solely relies on advertising revenue. Still also public media systems cannot exclude advertising as a source of revenue. Therefore both types are to a certain degree dependent on money coming in by advertisers.
And this implies consequences on the content provided by the media. As the attraction of advertisers becomes critically important, interests of the advertising industry frequently play a dominant role concerning the structure of content and the creation of environments favorable for advertising goods and services within the media becomes more and more common.
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Although Internet advertising only really started in 1994, revenues showed a steady and fast growth. In 1997 US$ 906.5 million were spent on on-line advertising. Compared with advertising revenue for the television industry in equivalent dollars for its third year, the Internet was slightly ahead, at US$ 907 million compared to television's US$ 834 million. 1998 on-line advertising grew by 112 percent to US$ 1.92 billion in revenues, and is on track to hit US$ 4 billion in 1999, which would put Internet advertising at about 2 percent of the U.S. ad market.
Table: Spending on On-Line Advertising by Category
(first quarter 1999)
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Table: Types of On-Line Advertising
(first quarter 1999)
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Source: Internet Advertising Bureau (IAB).
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The advertising industry has always relied on media to transport their messages and disseminate them to the public. Depending on the product or service advertised and the audience targeted different media are used. Besides cinema and outdoor advertising (posters etc.) the huge majority of ads is placed within the classical media landscape, which includes TV, newspapers, magazines and radio.
Whereas in most cases only a relatively small fraction of advertising budgets is spent on cinema, outdoor and radio advertising, newspapers, magazines and TV account for more than two thirds of the money spent on ads. Still with the growing popularity of new media advertisers and marketers have recently also discovered digital networks and especially the Internet for their purposes.
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The advertising industry is dominated by three huge advertising networks, which offer their services throughout the world. Gross income of the three leading agencies is twice as much, as the one of places four to ten.
Table: World's Top 10 Advertising Organizations 1999
(figures in millions of U.S. dollars)
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Table: Top 10 Global Marketers 1998
(figures in millions of U.S. dollars)
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On the other hand the three biggest advertisers only spend about US$ 2 millions less than places four to ten together. Whereas money spent on advertising in traditional media comes from very diverse categories, companies offering computer hard- and software, peripherals or Internet services mainly pay for on-line advertisements.
Table: Top 10 Internet Advertisers 1998
(figures in millions of U.S. dollars)
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Source: Advertising Age
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One of the most crucial issues in on-line advertising is the blurring of the line between editorial content and ads. Unlike on TV and in the print media, where guidelines on the labeling of advertisements, which shall enable the customer to distinguish between editorial and ads, exist, similar conventions have not yet evolved for Internet content. Labeling of online advertisement up to now has remained the rare exception, with only few sites (e.g.
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Although Web advertising becomes a significant portion of marketing budgets, advertisers are still unsure on how to unlock the potential of the Internet. Current findings show that:
- Consumer brands spend only a fraction of their advertising budget on on-line advertising.
- Technology companies spend five times more on advertising in the WWW.
- While banner campaigns are still popular, there is no standardized solution for on-line advertising.
- Ad pricing is based on CPM (costs per 1.000 visitors), rather than on results.
- Personalized targeting has not yet taken hold. Instead advertisers mainly target on content.
At the moment three dominant models are used for Internet advertising:
Destination Sites: They use entertainment, high production values and information to pull users in and bring them back again.
Micro Sites: Content sites or networks host small clusters of brand pages.
Banner Campaigns: Those include other forms of Web advertising like sponsorships.
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As within the traditional media landscape, Internet content providers have two primary means of generating revenue: Direct sales or subscriptions, and advertising. Especially as charging Internet users for access to content - with all the free material available - has proven problematic, advertising is seen as the best solution for creating revenues in the short term. Therefore intense competition has started among Internet content providers and access services to attract advertising money.
Table: Web-Sites Seeking Advertising
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Source: Adknowledge eAnalytics. Online Advertising Report
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"Stealth sites" account for a particular form of hidden advertisement. Stealth sites look like magazines, nicely designed and featuring articles on different topics, but in reality are set up for the sole purpose of featuring a certain companies products and services.
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Attempts to dictate their rules to the media has become a common practice among marketers and the advertising industry. Similar as in the
According to a memo published by the New York Post, Coca-Cola demands a free ad from any publication that publishes a Coke ad adjacent to stories on religion, politics, disease, sex, food, drugs, environmental issues, health, or stories that employ vulgar language. "Inappropriate editorial matter" will result in the publisher being liable for a "full make good," said the memo by Coke advertising agency
(Source: Odwyerpr.com: Coke Dictates nearby Editorial.
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Corporate public relations and advertising are not only regularly criticized by intellectuals, scientists and writers, but also by cultural and artistic institutions and practitioners. Themselves using advertising and public relations approaches their products are artistic pieces and also caricature the advertising and public relations industry.
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With television still being very popular, commercial entertainment has transferred the concept of soap operas onto the Web. The first of this new species of "Cybersoaps" was
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With new sponsorship models being developed, even further influence over content from the corporate side can be expected. Co-operating with
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Looking at how public relations practitioners advertise their services, they do not primarily seem to be followers of the "social engineering" approach.
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Often public relations are described as the effort to influence the public or relevant parts of it by representing self-interests to reach certain goals. This view of PR is most commonly found, when acting within the economic sphere. On the other hand organizations like the
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Unlike in the United Kingdom, where members of the
Although public relations activity is mostly associated with marketing and issues management for corporate firms, also PR for nations, politicians and NGOs is common. Among the first to pursue PR for nations was
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"Attention Brokerage" is one of the latest developments in the field of online advertising. The first Web-site applying the concept of selling and buying attention is Cybergold. Users, who want to earn money have to register and then look at ads, which, of course, they have to prove by e.g. downloading software. Attention, according to this idea, represents a good, which is worth being paid for.
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Mabye the thorniest ethical problem in Web publishing are links. "We need some sort of universal designation for links that have been purchased as opposed to links that belong to traditional editorial... There's no other medium - with the possible exception of late-late-night television - where this sort of blurring of advertising and editorial is tolerated.", says Steve Johnson from FEED.
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Public relations usually is associated with the influencing of public opinion. Therefore it has subsequently been linked with propaganda. Using one of the many definitions of propaganda "... the manipulation of symbols as a means of influencing attitudes on controversial matters" (Harold D. Lasswell), the terms propaganda and PR seem to be easily interchangeable.
Still many authors explicitly distinguish between public relations, advertising and propaganda. Unlike PR, which is often described as objective and extensive information of the public, advertising and propaganda are associated with manipulative activities. Nevertheless to treat public relations and propaganda as equivalents stands in the tradition of PR.
Also institutions like the
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Although it is generally hard to distinguish between public relations and propaganda,
It furthermore played a central role in the Gulf War. On behalf of the Kuwaiti government it presented a 15-year-old girl to testify before Congress about human rights violations in a Kuwaiti hospital. The girl, later found out to be the daughter of Kuwait's ambassador to the U.S., and its testimony then became the centerpiece of a finely tuned PR campaign orchestrated by Hill & Knowlton and co-ordinated with the White House on behalf of the government of Kuwait an the Citizens for a Free Kuwait group. Inflaming public opinion against Iraq and bringing the U.S. Congress in favor of war in the Gulf, this probably was one of the largest and most effective public relations campaigns in history.
Running campaigns against abortion for the Catholic Church and representing the
Accused of pursuing potentially illegal proxy spying operation for intelligence agencies, Richard Cheney, head of Hill & Knowltons New York office, denied this allegations, but said that "... in such a large organization you never know if there's not some sneak operation going on." On the other hand former
(Source: Carlisle, Johan: Public Relationships: Hill & Knowlton, Robert Gray, and the CIA.
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The public relations industry, the same as advertising, is concentrated in the hands of few dominant firms. Still, the striking element about corporate public relations is that PR firms are tightly related to advertising companies. Nine out of the ten biggest international PR agencies have close ties with the advertising industry. Also, looking at the largest acquisitions involving U.S. PR firms from 1997 to 1999 it is apparent that money coming from advertising agencies has played an important role.
Table: Top 10 PR Firms 1998
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With many PR agencies sold to advertising companies, the advertising industry's influence further increases; enabling them to offer their clients not only advertising services, but also know-how in marketing, public opinion, crisis and issues management and political lobbying.
Table: Acquisition of PR Agencies (1997 - 1999)
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Source: Odwyerpr.com.
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Applied to on-line content the advertising model leads to similar problems like in the traditional media. Dependence on advertising revenue puts pressure on content providers to consider advertising interests. Nevertheless new difficulties caused by the technical structure of online media, missing legal regulation and not yet established ethical rules, appear.
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