Online Advertising: A Double Edged Sword

Posted on June 29, 2011

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by Joseph Yo Sep Park

In the past, advertisements existed only on television, radio and in magazines and  newspapers. But these days, almost everything we see in our everyday life turns out to be an advertising tool. When we use applications for iPhone, there are tons of advertisements that we see while we are using it. Also, the blogs that we usually read can be an advertisement tool for companies. Although this phenomenon can be used perfectly by marketers, there can be some minor effects.

There are plenty of different ways to advertise online. In case of some portal sites such as Naver or Google, you will see large and small banners when you do searching or check your email. When one company wants to borrow Naver’s main banner from 5PM to 6PM on weekdays, it costs 32,000,000 Korean won. The company can also target consumers by age, location, and sex using this banner advertisement. Also, there is search advertisement which accounted for 46 percent of online ad revenue in 2010. When you pay for a search advertisement, your web page can be seen at the top of the list of search results. Another option is mobile advertising. When you get to use applications or the internet through smartphones, you can see a tiny advertisement in the top corner. Also, there are varieties of applications and QR codes made for the company’s marketing. These mobile advertisements’ revenue was estimated about $600 million in 2010. Lastly, there is advertisement using social networks. This is not an official way of advertising, but there are some cases that companies pay celebrities or blog managers. Once these people are paid, they deceptively advertise the company’s product or services so that many of their followers can see the post. So these new forms of advertising are growing rapidly these days. But there are a lot of opinions about right or wrong for these new types of ads.

Advertisements using portal sites, mobile applications, twitter and blogs are quite effective. More than 95 percent of Koreans use high-speed internet and cell phones. The internet itself is turning into a human-magnet. There can be no better place to advertise than the PC & mobile internet environments. The internet advertisement market is growing at a rapid pace. According to the Internet Marketing Council of Korea (IMCK), domestic internet advertise market exceeded 1583.5 billion won in 2010, up from 1292.3 billion won in 2009. By their research, display (banner) advertising volume was estimated 565.6 billion won in 2010, up from 456.2 billion won in 2009. Also, search advertisement volume was accounted for 1017.9 billion won in 2010, up from 836.1 billion won in 2009. Seen on this research, a scale of internet advertisement market is rapidly getting larger every year. And as its scale is getting bigger, this market is maturing to the level of industry.

“Online advertising has reached a level of maturity comparable to other mediums that have been deemed as significant ad platforms,” said Sherrill Mane, a senior vice president at the Interactive Advertising Bureau (IAB). “The fact that it’s still able to post double-digit growth speaks to the power of the Internet at a time when the economy is still struggling.” It seems that internet is an advertisement-heaven these days. But there exists some negative opinions about this huge internet advertisement industry too.

When we use applications from smartphone, the advertisement on the top corner often annoys us because it disrupts our sight. And when we read news from any on-line news website, almost half of the screen is filled with needless advertisements. All these situations annoy us because many advertisements that we didn’t mean to see block or interrupt the content that we actually wanted to see. And that’s just a part of the problem. Such ads which include suggestive ads, cigarette ads, and adult product ads such as Viagra not only annoy people but also affect adolescents in a bad way.

Celebrities’ deceptive Twitter ads can be a real problem. For the companies who want to pay the celebrities and deceptively advertise by tweeting subliminal messaging, it can be a gold mine because it can expose their company’s product or service to as many people as possible. Last year, for instance, fashion designer Henry Holland, who has more than 133,000 followers, tweeted “CAN’T WAIT FOR MY NEW RANGE ROVER..!!!” For that one tweet, Range Rover has exposed their product’s name to 133,000 people. And also, it’s a winning game to celebrities or blog managers because they can earn a huge amount of money by just sending out a few words. American artists such as Snoop Dogg can earn a reported $3,000 for sending a tweet endorsing a product. But these deceptive advertisements not mentioning that they are paid for are wrong. Not only is it deceiving people, but also it can break the public order of a trade. If those private advertisement market get bigger, than the justification of the trade will disappear soon enough. “Celebrities endorsing products had to be honest and open,” said Mark Borkowski, who is a media commentator. “If people are open and there is a conversation about it, then fine. The problems come when people endorse covertly, that puts the whole thing onto jeopardy.”

It’s not easy for us to think of a creative way to ban these kinds of advertisements. For cigarette companies, adult product companies and other companies that can advertise things that can affect teenagers badly, we can think of banning them from advertising on public online space by law. And for the deceptive twitter-blog advertisements, there are some precedents in the United States. The U.S. Federal Trade Commission insists that such endorsements must contain the words “ad” or “spon”(sponsored) to show the reference has been paid for.

New media advertisements are very good tools for marketing. But too many advertisements in one space or ads that can affect society in a bad way should be rejected. If there exists some regulations for major issues, the online advertisement environment can be less deceptive for consumers.

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