Anthony J. Pennings, PhD

WRITINGS ON DIGITAL STRATEGIES, ICT ECONOMICS, AND GLOBAL COMMUNICATIONS

Advertising, E-Commerce and the Power of Search

Posted on | December 10, 2010 | No Comments

At the core of global e-commerce’s extraordinary potential is the power of search engines and the new advertising strategies they enable. Search engine based advertising has continued to increase rapidly and drive e-commerce with it. The Interactive Advertising Bureau (IAB) reported that Internet advertising revenues in the U.S. totalled nearly $6.5 billion during the third quarter of 2010, a 17% increase over the same period a year earlier.

Source: IAB Internet Advertising Revenue Report/PwC (www.iab.net)

Advertisers have steadily moved to online marketing and advertising instead of traditional media outlets. Especially smaller businesses, often requiring stricter quantitative accountability for their expenditures in terms of how many people are viewing their ads, actual site visits and even directly quantifying sales in relation to their expenditure have combined advertising strategies with search capabilities, providing a powerful tool for small and large businesses as well as other organizations that need to reach out to customers and/or other targeted audiences.

Gateway sites that use specialized search engines and software-based “spiders” search the global infosphere cataloging information and responding nearly instantly to investigating queries with extraordinarily fast results. Google has climbed to the top of the search business and has capitalized on this success to become a major force in the web advertising business with over $20 billion in 2009 revenues, far outpacing the other advertising behemoths such as Omnicon and WPP.

What made Google so successful? Primarily it was an innovative method of ranking websites based on searching for links to that site. Google “crawls” the Internet using robotic “spiders” and uses PageRank, which assigns a numeric value how how significant a page is based on the links found to that site. It analyzes inbound and outbound links and uses a mathematical equation to determine the pages rank. This is something that a webmaster cannot tamper with to increase the website’s rank.

In fact, Google added a new twist this Fall. They changed their search algorithm when a online vendor claimed to the New York Times that the large number of complaints they were getting actually increased their page rank and consequently increased their profits.

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Anthony

Anthony J. Pennings, PhD has been on the NYU faculty since 2001 teaching digital media, information systems management, and global communications.

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  • About Me

    Professor and Associate Chair at State University of New York (SUNY) Korea. Recently taught at Hannam University in Daejeon, South Korea. Moved to Austin, Texas in August 2012 to join the Digital Media Management program at St. Edwards University. Spent the previous decade on the faculty at New York University teaching and researching information systems, media economics, and strategic communications.

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