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Chapter 6: Internet Advertising Pricing Methods: How to Calculate Advertising Costs ?

Chapter 6: Internet Advertising Pricing Methods: How to Calculate Advertising Costs ?. Payam Hanafizadeh and Mehdi Behboudi http :// www.igi-global.com/book/online-advertising-promotion/60769. COST-PER-THOUSAND AND FLAT-FEE EXPOSURE MODEL.

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Chapter 6: Internet Advertising Pricing Methods: How to Calculate Advertising Costs ?

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  1. Chapter 6: Internet Advertising Pricing Methods: How to Calculate Advertising Costs?
  2. Payam Hanafizadeh and Mehdi Behboudi http://www.igi-global.com/book/online-advertising-promotion/60769
  3. COST-PER-THOUSAND AND FLAT-FEE EXPOSURE MODEL Flat fee means paying a fixed amount for displaying an ad in a certain time period; this is the oldest method of online advertising pricing. http://www.boybdream.com/articles.php?articleid=37351
  4. COST-PER-THOUSAND AND FLAT-FEE EXPOSURE MODEL When a customer places an advertising order and the ad is published by CPM, more visitors rush on to the website, and this is a considerable success because it is a one-to-many communication model which looks for the audience to read its message. http://www.ehow.com/how_8455991_measure-cpm.html
  5. COST-PER-THOUSAND AND FLAT-FEE EXPOSURE MODEL Since customer behavior on the host website is dependent upon the type of website and the customers' motive to visit the site which is readily measurable, merely recording the number of visits is not enough information to sum up the value relative to the advertising cost. http://citywire.co.uk/new-model-adviser/comment-stuart-fowler-on-the-case-for-flat-fees/a397175
  6. CLICK-THROUGH RATE MODELS In this method, paying for ad exposure is based on the number of times the user has actually clicked on an advertisement. The price paid for one click on the ad is one to four percent of a dollar (Hoffman & Novak, 2000). http://enigmaprod.ch/en/good-to-know-2/what-are-cpm-cpc-ctr-and-cpa/
  7. CLICK-THROUGH RATE MODELS In this method of advertising pricing, the user not only should observe the ad, but also should actively decide to click on the ad and be involved with the target communication process. http://smallbusiness.chron.com/improve-ctr-rates-blog-55301.html
  8. PAY-PER-CLICK In this method, the search engines display the website's or their member companies' links in separate boxes, and usually place those links in the upper part of the screen. http://www.entrepreneur.com/article/222436
  9. PAY-PER-CLICK An important factor in this situation is a "web master", which puts the advertisers ' text or graphic links within their sites. When the users click on these links and enter the advertiser's website, the advertiser pays a fee, called a "bid", to the web master. A bid is defined as the highest per-click price proposed the advertiser is willing to pay.
  10. English Auction An English auction is one of the oldest auctions attended by both vendors, and initially, vendors are free to set a base price for their goods; if the prices do not reach the set price, the vendor can end the auction. The buyers offer the highest price they think is appropriate for their business until finally, the item is sold at the maximum price. http://thelawdictionary.org/english-auction/
  11. English Auction An English auction is done in two different methods: price price auction http://www.auctionzip.com/IN-Auctioneers/105844.html
  12. Dutch Auction This method has two basic disadvantages. First, in the kind of auction, there is no competition among buyers because one of the buyers might be interested in one product and might want to buy it at a higher price. Another disadvantage is that the base price is always much higher than the market price; otherwise, the auction has no interest in selling the item. http://www.webopedia.com/TERM/E/eBay_Dutch_auction.html
  13. EBay Auction On eBay, there is a special kind of auction known as an EBay auction. On this website, several samples of the same item are up for sale. http://www.watchcount.com/bids.php?zero
  14. EBay Auction After being informed about the item and the price, the customer begins the bidding process. The buyer, who has proposed a maximum price, buys the item at the lowest price accepted by the auction. https://www.bidnapper.com/
  15. Generalized First-Price Auction Introduced by Goto.com, the generalized first-price auction allows every customer to enter the highest price that they will pay by clicking on the advertisement. http://restud.oxfordjournals.org/content/78/1/112.full
  16. Generalized First-Price Auction In this way, the customer bidding the highest price gains first place. Convenience, low entrance cost and transparency of the process have meant great success for this method to the extent that giant search engines like Yahoo and MSN utilize this method; however, it needs adjustment. The rapid change of proposed prices and the prices-per-click result in some confusion.
  17. Generalized Second-Price Auction One of the newest pricing and sellingmechanisms in advertising is the Generalized Second-Price (GSP) auction. GSP is designed for online advertising and has achieved a lot of success in that field. This is the primary pricing mechanism of Google and Yahoo. http://www.techpolicy.com/Articles/Internet-Advertising-and-the-Generalized-Second-Pr.aspx
  18. Generalized Second-Price Auction As the GSPauction develops for online advertising, its rules follow the characteristics of the internet environment. GSP emphasizes that merchants suggest just one bid for each keyword (unless there is more than one item on sale. http://math.stackexchange.com/questions/253641/vickery-auction-questionsecond-price-auction
  19. COST PER ACTION A mail company first introduced CPA, where advertisers do not pay a fee to the publisher based on the exposure of the ad to the users or the number of clicks. http://www.dottraffic.com/glossary/cpa.php
  20. COST PER ACTION However, the publisher does receive a fee when the user performs an action on the merchant's website, such as selling, e-mail registration, filling out forms, participating in surveys and polls, attending online chats and creating an account. http://www.cpafix.com/forum.php
  21. COST PER ACTION Internet publishers state that the lack of interaction between users and the site is due to other reasons such as poor web design and unattractive content, which are not under the publishers' control. http://www.clickxpay.com/
  22. PAY-PER-PERCENTAGE IMPRESSION George Reyes, Google's chief executive officer, says "click frauds and misuses are now the greatest threat for the Internet economy and a big threat for our business model" (Crcomputerrepair.com, 2011). http://www.inoutscripts.com/addons.php?script=adserver&addon=ads-cpm
  23. PAY-PER-PERCENTAGE IMPRESSION Recently, a method called pay-per-percentage impression has been developed which prevents both clicking and publishing frauds. http://www.websitemagazine.com/content/blogs/posts/archive/2006/07/07/pay-per-percentage-analysis.aspx
  24. PAY-PER-PERCENTAGE IMPRESSION The most common fraud is the click fraud. In click frauds, a competitor of a merchant does a fake search for the keyword which relates to the merchant in order to decrease their competitor's ROI and to negatively affect their advertising budget. http://www.seoptimise.com/blog/2006/12/pay-per-percentage-of-impressions.html
  25. INCOM-BASED PRICING MODEL The income-based approach in online advertising pricing begins with recognition of the marketing objective for target communication, which results in affecting the consumer's attitude, encouraging the consumer to create a profile or leading the customer to buy. http://www.rics.org/sg/training-events/e-learning/e-learning/cost--income-based-methods-of-valuation1/cost--income-based-methods-of-valuation/
  26. INCOM-BASED PRICING MODEL Although pricing models utilized in online advertising are based on traditional advertising or mass media when there is a revenue base, these pricing mechanisms may be more related to a direct response pattern. http://www.scotsmanguide.com/default.asp?ID=3402
  27. PRIVACY The way that the internet gathers such information was impossible in the past; however, finding this information may also be more expensive and time-consuming than in the real world. It has become easier to commit fraud and pass on others' information, and it is not clear as to how is going to misuse personal information. http://www.adobe.com/privacy.html
  28. PRIVACY In Hoffman and Novak's study in 1999, it was shown that users assess a great value to their privacy, and this is obvious in surveys and enrollment on some websites.Since the names and information registered on those sites are nicknames, it is obvious that users want to have full control of their personal information. http://www.privacyfoundation.org/
  29. MORAL PRACTICE Research has attempted to put an end to consumer rights violation by clarifying some terminologies and mechanisms of the new online medium. One of the most important issues is the disguised advertisement. http://hepg.org/hep/book/130/TeachingAsAMoralPractice
  30. http://www.350media.com/2012/07/12/cpc-cpm-cpa-whats-the-best-value-for-your-ad-campaign/ http://www.350media.com/2012/07/12/cpc-cpm-cpa-whats-the-best-value-for-your-ad-campaign/ The End Of Chapter 6 http://yourbusiness.azcentral.com/internet-advertising/ http://www.wired.com/business/2013/03/marin-software-ipo/
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