This article will discuss the three "R's" of online advertising and why they are important.
3 R's of Online Advertising
Marketing is one of the three functions every business manages. Advertising is an important part of marketing and a company needs to do well at in order to succeed. Wasted advertising dollars may spell doom for a business especially when the competition is advertising well. Because measuring advertiser benefits or advertising effectiveness is so important many marketing plans and programs have shifted advertising dollars to online advertising because of the ability to track results and target particular customer segments. To aid marketers deciding where and how to advertise online the three r's of advertising are used as a tool to analyze the different opportunities available.
Below is a list of the three R's of online advertising as well as a description and explanation of why they are important.
The reach of an advertisement refers to the portion and frequency the population of users is exposed to the ad. For example, Google has a reach of approximately 150 million American Internet users which is approximately 80% of the US Internet user population.
The reach of an advertisement is important information for advertisers because it allows them to determine if the reach available is enough or not enough for their advertising needs.
The relevance of an ad refers to the degree the ad is similar, useful, or "like" the content being viewed, needs, and interest of the user and what the user is currently doing. For instance, an advertisement for a divorce lawyer is relevant to Ralph a mechanic and a current search user who is researching divorce attorneys. That same advertisement is not going to be relevant to Ralph three years from now when he is viewing the NYTimes.com story on Ford Motors.
The relevance of an advertisement is going to a big impact on the performance of the advertisement.
ROI - Return On Investment
The finance side of things is very important to advertising and marketing just like any other aspect of business. The ROI or Return On Investment is the value or benefit that is received by the advertiser per dollar the advertiser spends or invest in the advertisement.
If the advertiser spends $200.00 on content network advertisements through Google and that advertising generated $10,000 dollars worth of revenue, then one can most likely say that given the cost of the product or service is not too outrageous that advertiser should probably turn up the dial on their content network advertising budget.