A theoretical approach towards online advertising

Digital marketing and advertising has become a huge business in the modern era of business. Nowadays everyone uses the internet and the introduction of smart phones gave people the ability to stay connected around the clock. With an estimated 170,65 billion dollar revenue worldwide in 2016 and with the steady growth that has been observed, this market will only become bigger the more technologically advanced we become (Statista, 2017). In the competitive environment of the internet companies and service providers offer up their service for free in trade of showing the consumer advertisements on their platform. This has become common practice throughout the industry and millions of people are exposed to digital ads on a daily basis. With the advancements in technology companies are able to track their customers browsing habits and behavior, using browser cookies large data brokers gather and sell information about large amounts internet users back to retailers. An example of those data brokers is Acxiom, which recently opened the ability for US citizens to view their own detailed profiles (SCHARR, 2013). This kind of information is incredibly valuable, for example: being able to precisely advertise to someone and have your product match their search results. This year Google has gotten a €2.4 billion fine over abusing their market dominance with regards to search advertising (Boffey, 2017). Which according to research has the largest share of the digital marketing mix. With banner, social media and video advertising following in that order. Showing how much money is being made within this segment and the severe impact being the top on a search page has on the effectiveness of advertising.