J. Service Science & Management, 2009, 2: 117-128
Published Online June 2009 in SciRes (www.SciRP.org/journal/jssm)
Copyright © 2009 SciRes JSSM
On Line Media Market and New Advertising Agencies:
Analysis of an Italian Case
Simone Guercini
University of Florence, Florence, Italy.
Email: simone.guercini@unifi.it
Received August 21st, 2008; revised October 9th, 2008; accepted December 4th, 2008.
This article focuses on the profile of agencies which offer communication services through new media related to the
information role of the major search engines systems (like Google, Yahoo and others). In particular, attention is paid to
firms operating in that context which are taking an innovative profile when compared to communication agencies
linked to traditional media.
The article develops the following steps: in a first part the characteristics are taken into consideration through inno-
vative communication systems search engines in relation to market trends and the latest configuration of actors linked
to them; a second step considers the case of an Italian company acting as an agency in the so-called "online media
market", highlighting the type of skills and relationships developed through this; finally in a third part some thoughts
on the characteristics of the new communication agencies are proposed in comparison with those of the traditional ad-
vertising agencies operating with the help of the more traditional mass media.
At the conclusion of the article some implications of the analysis are developed and evaluations are made about the
development of new business communication services object of our analysis.
Keywords: search engines marketing, advertising agencies
1. Introduction
Market trends and communication characteristics of
the new media: In recent years the Internet advertising
generated the entire growth of the advertising business at
least in some major markets. The phenomenon of growth
of advertising through search engines is obviously wider
than Google and involves other actors1. Alongside these
players there are others who take the auxiliary and in-
termediaries involved in the market between the “search
engine” and communication needs expressed by actors
who are often small or lacking the necessary skills. There
are two areas of communication, one in which search
engine operates and the other traditional media, which
are in large part complementary, not least because search
engines on the one hand and commercial television or
print media on the other operate on advertising markets
different in some respects, the first predominantly in the
collection and classification (classified), the second in
the exposure of companies, brands and products (dis-
plays). The growth of Google in other words also tends
at least in part to increase the advertising pie, communi-
cating in a different and complementary way compared
to other players already present. So television and the
print media may look like a “brand builder”, while the
search engine on the Internet is proposed mainly as a
“brand finder” [1]. The same television also hosts in
many cases advertising by operators who want to affirm
on-line brands (as Ask.com or eBay).
Commercial television in many developed countries is
losing advertising revenue, but its existence does not
appear threatened in the near future. Since commercial
television is conducting advertising campaigns for the
same brands of companies based on the Internet, televi-
sion operators move toward a complementary business,
and only they have the opportunity to provide an audi-
ence of millions of people to advertisers in one fell
swoop. It is also true, however, that Google wants to
expand into video advertising and that the battle between
television and the Internet for advertising business is still
underway [2].
The global success of Google highlights the search
engine business as a broad and expanding component of
1The most im
ortant U.S.
ers are Yahoo, Microsoft, Aol, Ask.
the advertising business, one of the traditionally largest
and important in the field of marketing [3].
Information search is one of the main paths in con-
sumer behaviour research, but the phenomenon of online
research has only recently received more attention [4].
The consumers’ search behavior has been deeply rooted
in the information economics [5,6]. The cost-benefit
structure derived from information theory is the basis of
the explanation for the success of search engines in the
functioning of the Internet as a tool of communication in
general and especially in gathering information.
The search for information is an essential phase of the
purchase process, and thus an object of attention in tradi-
tional marketing, as more generally in the social sciences
[4]. In general terms, the perceived benefits and costs are
the two main determinants of the process of seeking in-
formation put in place by the purchase decision. The
benefits of research information are defined as the results
that enhance usefulness or provide value by facilitating
the achievement of objectives or a higher value level [7].
According to a model proposed in the literature [8], the
benefits of research are to be linked to indicators includ-
ing ease of use, effectiveness of research and satisfaction
of the user. The perceived cost of information is meas-
ured in terms of the economic and psychological effort
required in research, and is assessed in relation to factors
such as the ability to research, and thus the experience,
knowledge, education and preparation coming from peo-
ple involved in the process [8]. Of course, other factors
are of importance in the information acquisition process
entering into relations with benefits and costs arising
from this, such as purchasing strategies [9], situational
factors, personal factors and motivation to search [10].
Search engines assist Internet users by filtering the
excess information available on the world wide web
through the concept of “relevancy ranking” (order of
importance) in which the research results have been pre-
pared in accordance with algorithms that determine how
closely a document meets the query made by the user.
The criterion used by these classification algorithms var-
ies from case to case but typically is based on the char-
acteristics of the document, such as the number and fre-
quency of terms relevant to the question, the positions in
the document and the structure of links [11].
When the world wide web matured, the search engine
systems occupied a position of growing power, first in
channelling the attention of millions of users, then in
generating returns for websites through “contextual ad-
vertising programs” as in the case of Google AdSense
[12]. Search engines are in a position of power in the
online world, as witnessed by the fact that more than half
of all visitors come to a website through them rather than
a direct link to another web page [13], and taking into
account that, together search engine systems processed in
2005 over 4.5 billion queries per month [14], becoming
more than ten billion per month in the United States
alone by the end of 2007 [15].
These figures explain why a fierce competition is tak-
ing place to understand the search behavior of users of
search engines. Search engines may return many millions
of documents for each possible question, but users are
trying to select few of them. Some authors have high-
lighted this point through the development of empirical
investigations. For example, according to Spink and
Jansen [16] 73% of users of search engines never look
beyond the first page of results. This explains the interest
of advertisers to be included among the sites which are
able to seize these positions, and therefore justifies the
interest in understanding what factors may influence the
“page ranking” in a search engine system, as a crucial
factor for each website that wants to attract a large num-
ber of users [13]. That interest involves more than the
advertisers or the actors who manage websites with the
intent to optimize results from the search engine systems,
or following a process of search engine optimization.
The latter is defined as a process that seeks to place
highest a web page or a domain for specific keywords
that can be used in queries made by users.
The search engines importance creates considerable
interest in the arrangements that determine the function-
ing and techniques that can be used to improve the effec-
tiveness of the ranking of web pages. A study conducted
by systems corresponding to InfoSeek, Excite, AltaVista
and Lycos, at the end of the nineties [17] showed the
importance assumed by the characteristics of informative
title, headers, keywords and fields on this page. Recently,
with the advent of a prominent position obtained by
Google, and attention focused on the algorithms on
which the function of this operator is based, and in par-
ticular on the algorithm of page ranking (PR) used by it
The importance of communication in new media has
led to the emergence of a new industry formed by com-
panies operating in search engine optimization (Seo).
These companies are trying to determine the most im-
portant factors that can be used to obtain a high ranking
in search results on the SE systems and then applying
these factors to the websites of customers in exchange
for commissions [20]. Given the nature of consultants
and agents of the operators of this industry, its impor-
tance to the process of marketing communications and,
more generally, communications business, is that players
can be seen in relation to traditional advertising agencies
and how bidders services potentially substitute to the
extent that the new media are substitutes for the tradi-
tional media. Despite their increasing number, these
companies have only partial information on the heuris-
tics used by search engine systems [13]. This informa-
Copyright © 2009 SciRes JSSM
tion is mainly gained through a process of “trial and er-
ror” [18].
The attention to the role of search engines is con-
nected to the implications for marketing and sales tech-
niques resulting from “page ranking” [21]. The devel-
opment and impact of “page ranking” and in particular
the “page ranking algorithm” used by search engines, as
the “topic sensitive page ranking” (Tspr) allows a fo-
cused development of marketing strategies on the Inter-
net under current conditions of the electronic market-
place. It is therefore important to understand search en-
gine optimization systems (or Seo), because the Internet
marketing approaches which are developed today are
derived from the calculation, the implementation and
the impact of these concepts. The phenomena of page
ranking and topic sensitive page ranking algorithms ob-
tained from the assessment of the structure of which are
tied to major Seo strategies. The change in search engine
technology shows how these algorithms are becoming
increasingly complex, and the comparison to that evolu-
tion can take into account only some elements of a phe-
nomenon of large-scale change [22].
The literature has identified several factors that may
influence the positioning of a website on a search engine
ranking system and distinguishes into two categories: 1)
factors that refer to the web page, as the existence and
frequency of keywords (query-factors); 2) factors which
make reference to information from external the web
pages that are connected by links to web page in question
(query-independent-factors). The contribution of indi-
vidual factors linked to both types are difficult to assess
since the operators of search engine don’t reveal what
they use when determining the ranking of a webpage.
These considerations explain why it is difficult to
identify the factors involved in an algorithm ranking
without a large database of millions of “search engine
results pages” (Serp) and without making use of ex-
tremely sophisticated data mining. Despite these difficul-
ties, there are effective techniques that can be taken to
achieve levels of high ranking sites and that have been
identified from the best practices used by the most suc-
cessful Seo [13].
The analysis process is generally applied to Google,
for years the leader among the search engine systems,
which already realized in 2005 the 46.2% of all questions
of research (queries) produced by users worldwide [14].
This percentage has risen further in the last years to es-
tablish a market share for Google that represents the ab-
solute majority of clicks made at the international level2.
Of the parameters (estimated at over two hundred) that
Google references in determining the rank of a page,
some were indicated as more effective in recent studies
[13]: 1) number of pages in a web site indexed; 2) the
page rank of the site3; 3) the number of incoming links to
a website (also defined as “inbound hyperlinks”); 4) the
age of the domain name of the website; 5) a list of web-
sites, other web engine systems and other social net-
works [23].
Search engines were classified in systems which pre-
vail as “pay-for-performance” and other systems defined
as “traditional” ones [11]. The pay-for-performance sys-
tems (Pfp) provide search services for documents on the
Web giving a rank to documents not only on the basis of
the characteristics of content, but also in agreement with
investments that owners of a website intended to achieve.
In other words, Pfp systems provide a service ranking of
web pages in relation solely by the amount of money
paid by advertisers for certain keywords and not as de-
termined the relevance of the document itself compared
to a given query. To make the listing of a site on a Pfp
search engine the owner of the site proposed bids on
keywords that describe properly the website. The amount
will be paid each time a user visits the site when it ap-
pears in the list of search results produced by the Pfp
system. Generally a higher offer corresponds to higher
rankings for the site, and thus a greater probability that
the user visits the web site as a result of a query4. The
lists provided by Pfp systems are in this sense fully
comparable to advertising since they represent an adver-
tising product with specific characteristics but similar to
others. Some studies have provided data to support that
Pfp search engines were less effective in providing qual-
ity search results compared to the traditional ones, re-
sulting in effects that are tainted by paid work [11]. In
particular, these studies highlight how the services pro-
vided by Pfp systems respond to serve needs of users
compared to traditional engine [11]. It follows that the
rest of Pfp systems are somewhat controversial since the
user may not be clear which site reported in a higher
position in rank is not the most relevant site, but that for
which advertisers are willing to pay a greater considera-
tion [24,25]. This focuses on the pitfalls associated with
new media that can recall nature, although not yet in the
proportions, the fears related to forms of advertising pro-
posals in the past by media which have today become
traditional [26].
2In the United States in February 2008 were carried out about 10 billion
of questions, which the 59.2% (5.9 billion) carried out on Google,
21.6% (2.1 billion) implemented on Yahoo, and remainder on other
search engine, the most important of which are Microsoft, Ask and
Aol [15].
3In this case the term “page ranking” does not want to indicate the final
result of indexation made by the search engine, but the result of a gen-
eral algorithm which is known to staff area which is described in
Rimbach et al. [22].
4Among the search engine systems returned to the Pfp model are men-
tioned in the literature cases of Overture, FindWhat, Sprinks, the first
case is the subject of a comparison with Google, the latter interpreted
y some authors as a search engine and not linked to models Pfp and
in this sense “traditional” [11].
In any case the variety of search engines and the dif-
ferentiation of algorithms accessible is itself a value.
Copyright © 2009 SciRes JSSM
While the development of high quality pages is very
good for users, this is not conducive to the appearance of
diversification, which is itself an element of security for
the user. In other words, the presence of several types of
search engine systems goes against the homogenization
trend of the available information, which could indicate
sites actually more relevant but is not certain to be fa-
vorable to users who turn to search engines to acquire
information [22].
2. The Case of the New Advertising Agency
in the Italian On-Line Media Market
The importance of the new advertising and communica-
tion context above described is confirmed by the emer-
gence of a new wave of companies that assume the role
of intermediaries, auxiliaries and consultants in commu-
nication processes related to search engine systems (SE)
and generally to the Internet advertising. These realities
are now increasingly present and also relevant in Italy in
addition to the international level. Search engines are
working on two main objectives to support its develop-
ment: 1) identify the optimum information for a search
conducted by users; 2) effectively and efficiently manage
the index produced by their algorithms and that translates
in the “search engine ranking page” or Serp. While
search engines used technologies with increasing success
to identify complex web pages relevant to a question
(query), all the strategies of the actors as agencies or as
consultants for the optimization of the statement of ad-
vertisers on the Internet (or search engine optimisator –
Seo) operate through heuristic tools to achieve this result,
such as taking the initiative to build highly relevant web
The case described in this paper is a SEO named “Al-
pha” for confidentiality reasons. This is a company
founded in July 2006 with offices in an Italian city as
well as in London, which has as its mission to “industri-
alize the processes of the value chain in on-line advertis-
ing for the benefit of all Internet users and quality of
their research” coming to “implement the processes of
global companies by world leaders which can be con-
trolled to maximize the return on investment of advertis-
ers… offering solutions and specific opportunities to
each market”5. The definition of return on advertising
spending (Roas) assumes the characteristic of key con-
cept in justifying the presence of actors like Alpha. Al-
pha is one of the “optimizers, converters, distributors of
information on behalf of advertisers in the on-line media
market”. This company is a strongly oriented to growth
so that, despite the recent origin, it is expected by 2009
to speak “14 different languages, providing information
as precise and ideal solutions to users, guiding them to
investors as buyers of high potential purchase”6.
The parameters of this agency have followed a trend
of rapid growth. Created in July 2006, the company
counts at the end of 2006 two employees and produces
the first 500,000 euros of turnover. At the end of 2007
there are 6 full-time employees, plus some external con-
sultants, and the share turnover reached 3.7 million euros.
This dynamism is reflected in the values described in the
documents of external communication, which include
“transform ideas and opportunities in winning models,
international business and change in speed, high en-
hancement of each individual user”. The company is
geared to achieve media planning and media buying on
the Internet. According to business records the company
is to monitor about 60 thousand potential customers, who
are brought into contact with companies that provide
goods or services they are looking for and with advertis-
ers who spend over half a million U.S. dollars each
month. Overall, the company operates in the field of
“search marketing”, the context in which the develop-
ment of technology platforms with exclusive rights and
the creation of high traffic portals gave quick access to
international markets both in America and Europe. In
this context Alfa operates as an agency engaged in a
steady growth in partnerships with stakeholders in the
sector, an aspect for which a significant dimension of the
considerable financial credibility is assumed. Among the
activities carried out by this company is including the
creation of web platforms and e-commerce at local and
global multi-language management, with direct relation-
ships with agencies that were operating in early 2008 in
six countries speaking four different languages. The firm
tries to develop technologies for managing statistical and
automated control of know-how around both qualitative
and quantitative basic marketing.
Various sources testify to the growing importance that
players offering “digital services” are to have in the for-
mulation of new “communication systems” [27]. By
digital services is meant the types of corporate services
that are ordered, delivered, used and paid in full on the
Internet (from logos and ring tones, lotteries, SMS, de-
velopment of pages online…) up to the inclusion of
competitive services for actors to other areas of commu-
nication as mobile call-by-call [27].
The product supplied by Alpha includes the develop-
ment of lists of contextual inventories for individual
markets, categories and products. The production of this
database with characteristics of portfolio information is
constantly being developed and updated with the idea of
making the company a “dynamic zeitgeist and a constant
mirror of the new trends of the moment”. Potential cus-
5The considerations given in quotes are taken from “2008 company
profile” of the company Alfa.
es in
uotes are taken from business records.
Copyright © 2009 SciRes JSSM
tomers are categorized in terms of geographic position
thanks to a system of geo-targeting oriented to local ad-
vertisers with precision at the metropolitan level. Even
on the basis of this activity the Alpha company, as re-
ported by business records, “offers companies the man-
agement and development of advertising platforms
on-line, the integration and marketing of pre-existing
advertising, the placement in the organic results of the
major search engines, including Google, Yahoo and Mi-
crosoft Live Search”. Alpha offers to advertisers “a con-
tinuous exposure in the results of the major agencies
PPC (pay per click) through a system of financial control
consistently and continuously generated by specific al-
gorithms”, whereby “direct application program interface
(API) with the major players and experts of search mar-
keting continually updated… ensure returns on advertis-
ing spending (Roas)”. On behalf of clients, the company
is to provide services related to online advertising pres-
ence, such as 1) control of fraud and 2) verification of
compliance with the prohibitions of certain communica-
tion notices. By the first is meant the activity to verify
and neutralize the possibility that “actors who sell com-
munication with pay-per-click formulas achieve flows in
a fraudulent manner and not as result of the normal
communication market”. By the second is meant the
verification of compliance with the marketing prohibi-
tions in relation to on-line presence in markets which are
sensitive to certain subject for religious, political or cul-
tural reasons (alcohol, tobacco, pornography and other).
One possible representation of the position of Alpha as
communication agency and other players in advertising
on the Internet is suggested by Figure 1.
The company Alpha manages over one hundred Inter-
net portals with new openings every month, six million
potential customers sent to advertisers. It is operating
with Google Adwords certification. Alpha operates as a
partner of actors representing an established presence in
the “Internet-based” economy in Italy and abroad, par-
ticularly through its partnership with one of these, the
largest corporate customer, which produced activities for
1.2 million US dollars in 2007 with a doubling to 2.5
million in 2008 expected. In the first three months
207thousand sign-ups were acquired for the U.S. sub-
sidiary of this partner of reference, with a value gener-
ated in the sole distribution channel of about 3.5 million
U.S. dollars. More generally, the network of partners
includes search engines, directories, shopping engines
and content sites. The company operates in a context of
relations with actors of different types, both in a busi-
ness-to-business, and in a business-to-consumer market.
Alpha can play a role that span the entire supply chain,
which can be defined as the type business-to-business-to-
consumer. Relations with partners are distinct in “key
strategic relationships”, which include the relationship
with Italian and British Internet organizations. In addi-
tion to strategic relationships with these companies, Alfa
has developed relations with other leading companies in
SE systems, including those between Google, Yahoo,
Microsoft AdCenter, and with a pool of other firms of
the Internet advertising business (Ebates and others) with
which it is oriented to develop co-marketing projects. A
simplified representation of this network of relationships
in which the company builds its market reference [28] is
described in Figure 2.
The international expansion of an operator of this kind
only marginally requires the physical presence in differ-
ent places, occurring primarily through the use of virtual
media. On this basis, Alfa can boast at the end of 2007
the active presence in three countries, which are the
United Kingdom (where it also has a physical office), the
United States and Brazil. During 2008 the expansion of
activities in other markets including Australia, France,
Holland, Spain, Germany is planned as well as in other
countries such as China, Japan, Singapore and Korea.
Turning to the sector landscape, the process of info-med-
iation [29] made through onlinemedia market interested
in “25 different product categories, among which finance,
banking and insurance products, travel, shopping, motors,
mobile phones, electronics, food, health & beauty and
From an organizational point of view, the company is
leaning toward a growth model that wants to be based, as
can be seen by business records “on creating a corporate
culture that puts every member or employee as a cus-
tomer and leader of another member according to an
internal marketing approach in order to obtain excellence
in internal processes”. Alpha’s management considers
Figure 1. The position of communications on-line media
market in the relationship with advertisers and other actors
Figure 2. The network of relationships in which the agency
Alpha builds its market reference
Copyright © 2009 SciRes JSSM
that “the central unit contributes to the systematic control
and strategic development management and planning in
support of operations of trading on-line on an industrial
scale, implementing a policy of risk control-oriented
lobbying for new partnerships, in the maintenance of
operating margins in each operation”. In this context the
organization, young and still small, is experiencing an
elaborate articulation of business functions and organiza-
tional responsibility.
In the managers’ view the large sized actors are able to
directly apply to the major search engines like Google to
propose its own advertising budget and directly manage
an optimization process of the contacts with users mov-
ing on the Internet. For smaller actors with limited budg-
ets, direct contact with Google could be more difficult,
especially because the latter actor could not find interest
in a direct relationship. Nonetheless, these players can
conveniently produce communication through search
engines, working relationship with agencies that can in-
terface and above all have the know-how to assess the
performance and then optimize the conditions for the
cost of communication through the new media. When it
comes to optimizing it refers to the conversion of con-
tacts in purchases of product, and then calculate the cost
of acquisition (Coa). Some operators may in fact simply
navigate to define a margin on each unit of product /
service sold as a result of the communication system
built by the search engine. As highlights one of the
co-founders of Alpha there “may have operators who
establish how much they can spend on each unit of
product sold through the search engine advertising … for
example, an advertiser can define a Coa of 4 U.S. dollars
and declare they can spend on advertising up to that
amount for each unit of output sold…”. Having said that
the actor who holds himself out as an advertising agency
or should orient itself to respond to the advertiser track-
ing in almost instantaneous terms which is his return on
advertising spending (Roas). To achieve its role as the
optimizer, the online communication agency must act by
developing and verifying knowledge on the conversion
rates of exhibitions in clicks and clicks in acquisitions.
According to one of the co-founders of Alpha “… if on
500 users which have clicked there are ten of them who
bought, this element gives us information on the rela-
tionship between cost-per-click and cost-per-acquisition
which is vital to the relationship with the advertiser…
performance is not so easily measurable as described in
this example …”. The fact that the commission on re-
quest (through systems SE) generates by definition
higher conversion rates does not mean that the commu-
nication is higher than that achieved with traditional me-
dia. Indeed, the conversion rate of contacts in return in
terms of sales “depends on factors such as timing and
brand image, even and especially through other means”.
The leaders of Alpha confirm the perception that the
traditional ways and forms of online advertising are often
complementary in nature, and as such it is appropriate to
analyse not as an alternative, but as an integrated effort.
If the product and brand doesn’t mature through com-
munication that produces awareness, even the possibility
of converting leads into sales appears conditioning. The
weight of the media and traditional models of communi-
cation don’t lose importance as the techniques tradition-
ally used in communication such as marketing color,
attention to the intercultural dimension in communica-
tion through a global potential.
3. The Profile of the New Advertising Agency
Integrated in the New Media Market
The level of success of an advertising campaign in the
on-line context is an issue which was the subject of much
attention from academics and operatives, even with ref-
erence to specific issues such as brand tracking [31]. Not
surprisingly, some authors detect a strong interest from
advertising agencies facing the possibility of judging the
effects of marketing and metric marketing for Internet
advertising [32], especially in some countries [33], as
emerges from research about the opportunities to identify
how client marketers are evaluating its effectiveness
[34,35]. The rise of importance of marketing metrics and
accounting has also been observed by other authors [36]
and of course is apparent in the new media, since in this
context the actors of the on-line media market research
opportunities related to identifying how advertisers are
evaluating the effectiveness of Internet advertising per-
formance of their website and what perceptions are asso-
ciated with those components of their communication
The pricing of advertising on the Internet includes tra-
ditional forms of measurement such as those related to
subjective measurements applied to advertisers, with any
adjustments relating to various factors (for example, the
season). In addition to these traditional forms, this meas-
urement may be the result of mathematical formulas re-
lated to the measurement of effectiveness. More pre-
cisely we can recognize three pricing models and meas-
urements that are commonly used to buy and sell “ban-
ner advertising”, and which include: 1) costs based on
exposure to thousands of users (exposure-based
cost-per-thousand); 2) costs for each click that demon-
strate forms of interaction (interaction-based click-thr-
ough rate); 3) pricing models based on results (out-
come-based pricing model) where advertisers pay for
measurable elements as requests or purchases [34].
7In this area, for example, a study designed to identify factors which
were capable of supporting websites success has identified that a good
candidate was interactivit
. The definition of pricing per thousands of exposures is
Copyright © 2009 SciRes JSSM
considered by many advertisers as a formula with a high
degree of verifiability compared to others [40,41]. Using
that pricing model seems to be based on three considera-
tions. Firstly it may miss measures and uniform stan-
dards of control based on the results in terms of conver-
sion rates. Secondly, the cost-per-thousand model (basi-
cally cost per click - Cpc) can be directly compared with
the standard practice in more traditional media (particu-
larly the print media). Finally, to charge on the basis of
costs is consistent with the traditional responsibilities of
the publisher to deliver to the advertiser an opportunity
to be visible [34,41].
This is the area where advertising agencies are in-
volved, which has already been examined in the litera-
ture on the basis of the experience of advertising agen-
cies in important countries [36]. But this topic is only
partially explored. The communication agencies in the
on-line media market tend to favour a pricing based
solely on objective measures or clicking choices dis-
played. In particular, the search engine optimizers are
geared to develop communication of the performance
metrics on the Internet. Already research carried out
some years ago [42] showed that advertising agencies
operating on the Internet in the 86% of cases declared
using conversion rates to measure the effectiveness of
the advertising and only 50% declared using criteria
based on a cost-per-thousand exposure or, with different
terminology, cost-per-impression [36].
Advertising on the Internet has its own evolution
which starts almost immediately with the advent of the
network and which is marked by a change of logic un-
derlying the possible pricing models for the advertiser.
In the second half of the nineties the Internet business
is essentially the offer of access to the network (Internet
service provider) and advertising on the network is simi-
lar to a billboard road, which looks like material inserted
in the sites of various actors, including at that time those
of search engines [43]. In the next five years (2000-2005)
the number of accesses to the Internet had grown enor-
mously and businesses operating on the Internet ceased
to obtain a fee for the service network access, and in
many cases based their revenues on compensation for
supplying advertising space. From this moment a process
of consideration of advertising defined in terms of cost
per impression (Cpim) becomes increasingly weaker.
This is a form of remuneration agreement whereby every
thousand “passers” by to the site determines the payment
of a fee by the poster. To detect the number of steps
which are present at this stage essentially two detection
systems that also match more generally two types of
other media advertising. The first collection system cor-
responds to the system “by census” put in place by the
same publishers. The second system provides for the
evaluation of the audience by third parties, making use of
detection systems based on panels, such as those put in
place by operators as AC Nielsen. These are systems that,
in the opinion of the managers interviewed in the sector,
give rise to significant errors that are dependent on the
form and the very structure of the panel. Both systems,
those “by census” as well as those based on surveys by
the panel of third parties are still oriented to “count” the
number of “eyes that see advertising”. Beginning in 2005
the advent of new technologies and the flux of new capi-
tal lead to a new phase of development of businesses
based on the Internet [44,45].
These new technologies are behind the advent of a se-
ries of products and platforms that make possible the
reformulation of the new business model of online
communication. Starting from this moment the commu-
nication process carried out in this context tends to differ
from what is the traditional world of advertising. This is
a step that business operators consider very important.
In the first place by traditional forms of evaluation of
the consideration of advertising. Cost per impression of
Cpim, it moves a more advanced type of cost per click
(Cpc), and finally to cost per acquisition (Cpa). These
fee formulas for advertising that have no equivalents in
advertising built on traditional media such as print media
and television. These formulas are possible only for
communication on the Internet, in relation to the poten-
tial application of related technology. This development
makes a decisive contribution to individuality and char-
acter specific advertising carried out on online media.
The cost of advertising is then connected not only to
the relationship between media and audience, in other
words it is not simply related to the extension of public
exposure to the message because it si reached by means
of communication. In the new models the cost of adver-
tising is linked more directly to the number of players
who are not only exposed, but at least choose to learn
more about the object advertised (Cpc), or who buy
(Cpa). This step is made possible by technology, but also
from the evaluation on a statistical basis of the relation-
ship between levels of the purchasing process conducted
on-line (conversion rates). In the case of Cpa advertising
changes the nature and the cost of communication. Ad-
vertising can then be evaluated in direct relation to the
margin of the single sale. The extension of advertising
for Cpa remains limited, while it is more extensive on
Cpc, where most of the advertising proposal lies, such as
the leading search engine Google.
The process of evaluating the benefit of advertising,
which is inevitably linked to evaluating the cost related
to it, we are freed from testing the number of “views”, or
in other words from its “estimated” audience. The ability
to connect to the purchase advertising formula allows the
publisher to ask for a share directly for the purchase and
not just for the exposition and view. The advertising on
Copyright © 2009 SciRes JSSM
the Internet in this way tends to be welded directly to the
achievement of the sale. The publisher is not only seller
the means of communication, but in a sense a direct
seller of products, asking for a commission for the sale
(Cpa) and not only for the view of the information be-
hind the banner (Cpc) or just passing by the site (Cpim).
This “short-cut” between communication activities
and sales activities has consequences on the publishers’
policies and perspectives. Visitors passing by is no
longer sufficient, but we must improve the capability of
communication to transform that passage into clicks
(which assumes direct importance in the Cpc system)
and then in sales (which assumes direct importance in
the Cpa system). In other words, the communication
process follows the purchase process in its virtual aspect,
linking the cost of advertising for the advertiser to the
different parameters forming part of the second and third
steps of the evaluated process of online purchasing (view,
information, purchase). A chain of the steps in the pur-
chasing process is therefore reconstructible and a "pipe-
line" of online communication, where the advertiser can
pay different elements of the process, to transform the de
facto editor in a sales player which is recognised a Cpa
commission in the system. This sequence of alternatives
is the subject of the representation in Figure 3.
The advent of “pay per click” makes significant
changes in on-line advertising, both in the communica-
tion characteristics and policies of the publisher, but also
to the very nature of the entity providing work space for
advertisers. To be honest this process is not immediate in
the sense that different actors in the chain may be di-
rected to different levels of the process of informa-
tion-evaluation-choice-purchase by the consumer. This
process allows the advertiser to connect a cost incurred,
with payment for communication, not generic indicators
of “visibility” (or “impression”), but directly to the result
in terms of sales. Not only that, but this result can be
measured in terms of statistical estimation, based on the
historical series conversion from impression to click and
from click to acquisition, but also directly through the
counting of “complete chains” in the path impres-
sion-click-acquisition actually made, and to make this
ex-ante estimate the impact of online communication on
This context there is movement toward at seeking an
optimization of online communication (by Seo already
Figure 3. The process of switching between different cost
configurations for the on-line advertising
mentioned in previous sections). Players of this type (as
the described case Alpha) operate in a context that pre-
sents considerable specificity.
The traditional advertising agencies are linked to tra-
ditional media, which represent the “technology” dimen-
sion around which their production processes have
shaped as well as their activities connecting with their
current and potential customers. These media have an
important role in generating awareness of products, and
in general were not able to directly link their contribution
to the benefits of sale. The advent of new media, with
their new potential, may instead make it possible to con-
nect the communication process directly to the sales of
the product, bringing the cost of communication to take a
different value in both terms of accounting and economic
management. Indeed, the cost of advertising can be
linked in this case directly to sales that derive from it,
and that are specifically measurable in the case of the
cost-per-acquisition solution (specific and direct costs).
Advertising on the Internet passes so that investment
recoverable over time, assumes the characteristics of
direct costs related to the online sales process.
This point leads to questions about the nature of the
communication process and the kind of advertising gen-
erated by search engines, as there is no doubt that these
are processes that still fall within the field of marketing
communications. Therefore the production of communi-
cation and advertising in the on-line media market re-
quires economic and business evaluations and manage-
ment of a different nature from those made in the tradi-
tional media market. Enabling concrete potential related
to new communication technologies requires a presidium
of knowledge, which may be realized using the advice of
specialist, which are in the case of search systems the
specialized actors already analysed. These consultants
assume a contiguous position or play a role which can be
even mixed with that of the traditional communications
agency. In this context, integration of consultancy and
agency communication follows an opposite path that
traditional agencies follow in other instances. While the
agencies of communication based on the traditional me-
dia can experience a tendency to shift from “producers”
of advertising and communication to “consultants” for
client companies for advertising and communications,
the new agencies of the on-line media market can start
from consultancy for the optimization of on-line visibil-
ity to later take the profile of communication agency that
integrates additional competencies.
We have seen how the evolving technologies leading
to a change in the nature of the communication process
and a change of the actors which provide advertising for
the on-line media. Change also affects the competitive
processes that are generated in the advertising market
and the dynamics affecting actors operating in the value
Copyright © 2009 SciRes JSSM
chain of advertising. Those who are able to offer Cpa
communication conditions has a product in itself supe-
rior in terms of advertising sales compared to other tradi-
tional forms, putting the new media (Internet and search
engines specifically) in positions of superiority and ad-
vantage, at least in terms of connection with their sales
activities, compared to the means of traditional mass
communication (first of all print media and television).
In terms of actors operating in the value chain of adver-
tising, there are two factors that influence and determine
a significant change. A first factor relates to the need for
a new type of technical skills and expertise, which tradi-
tionally were absent from the advertising agency [46],
which offer this new type of communication according to
the new logic above described. A second factor is related
to the presence of actors willing to work on terms of re-
muneration (pay-cost) of a different nature, which opens
the space to new brokers who are, based on appropriate
evaluations, among the various levels, as “converting” to
solutions expressed in terms of cost per contact in solu-
tions expressed in terms of cost per acquisition.
The new forms of communications determine for the
advertiser an advertising cost of a different nature than
that understood in the traditional sense. The communica-
tion budget assigned to traditional media represents a
risk because the investor can not assess with certainty the
returns related to the cost incurred. This situation will
occur even if the investment in online communication
falls under the model Cpim. In other words, the investor
can buy on-line advertising in the some way as buying
advertising on other media, by simply acquiring visual
space on the Internet to which the public accesses the
media. Changes arriving with the advent of the Cpc
model and especially of the Cpa model, also called “cost
of acquisition” (Coa). In the latter case, the cost of the
online communication takes a different nature as it can
be conceived as a “direct cost”, and even as a “specific
cost” to the single acquisition. In this case, the commu-
nication budget is no longer limited by the decisions on
expenditure by the advertiser, but by how much on-line
traffic is available and existing since the sale will finance
the cost of listing.
In this process, the role of the advertising agency is
changing in several respects. In the first place it assumes
a characteristic of the “communication consultant”, with
the same frequency as in the context of the agencies that
operate on relatively more traditional media (newspapers,
television, billboards, etc.). In the second place it is the
customer who changes to a different logic from the past
and requires the agency to make a contribution of dif-
ferent nature, in some respects a hybrid role between
communication and sales8.
It is estimated then the concept of click-to-rate (Ctr),
or how many clicks it takes to produce a sale (for exam-
ple, a Ctr 1% will mean that a sale occurs every one
hundred clicks). This sale will depend on the various
steps that are in the purchasing process, from the first
click produced through the effectiveness of sales promo-
tional sense, and to the generation of the final payment
(for example through credit card).
4. Some Final Remarks
The interrelationship between online media and market-
ing communications is a topic of growing interest and
importance. The complexity of this issue is due to vari-
ous factors which include: 1) current trends in the tradi-
tional advertising agency; 2) the emergence of new ac-
tors involved in giving support and advice to those who
wish to communicate on-line; 3) the integration between
traditional advertising agencies and new actors and new
technologies relevant to online communication. In this
sense on the one hand the trends of the traditional adver-
tising agency lead it from a role of producer of advertis-
ing to a role of provider of resources and consultancy for
the client involved in the communication business [47].
The new players in relation to the new media, such as
agencies for communication on the Internet, can in-
creasingly provide activities of different types, alongside
with solutions similar to those of traditional agencies and
related site design and the formulation of elements of
on-line visibility. These may be related to the develop-
ment of a technological base to specific communications
companies involved, rather than on issues of communi-
cation in terms of exposure in the new media, integrating
with visibility systems of the site in relation to ranking
offered by search engines. The new communication
agencies taken into consideration in this article are pro-
posed as communication optimizers through search en-
gines (search engine optimizer - Seo). The specific tech-
nical culture in this type of player makes significant un-
derstanding of the complexity of the third factor above
proposed, which presents a more general value, and that
concerns the integration of new and traditional actors in
the field of advertising services and communication [48].
As highlighted by Lace [36] the debate on the media,
and especially on integration of new media with tradi-
tional media, has been largely confined to matters of
design and interface with the consumer or generalisa-
tions on the need for synergies [49]. The difficulty of
traditional advertising agencies to follow the new context
of communication [50,51] not only interests technical
sophistication related to the inference mechanisms of the
functioning of search engines, but is also important on
8In the same manufacturing enterprises in countries with higher adver-
tising income, from activities “outsourced” to agencies experts, be-
comes in some cases “core business” company. In this area, however
the company does not have all the technical skills, and certainly not
have the same ability to purchase media, for which the agency main-
tains a role as adviser and intermediar
for the means.
Copyright © 2009 SciRes JSSM
the relatively more traditional front of design and online
visualizing graphics [36].
The new online agency can operate, as we have seen,
on a ground which is in some respects beyond the scope
of communication and engages the issue of the sale. To
understand the role of this agency it is important to enter
the chain of its activities and see what skills and profiles
are required.
For a long time the traditional advertising agency has
specialized professionals such as those present in the
creative department in which there are both specialist in
computer images and graphics (visualizer) and special-
ists of texts (copywriter). There is also the company's
interface with customers (accounts), essential for the
acquisition and management of budget, and the interface
with the means of communication (purchase vehicles). In
the case of a new actor in the online communication
structure, skills develop in different directions dictated
by the characteristics of the media and business models
of communication just described.
Some authors have shown in past years the develop-
ment of skills in the area of new media as a process to be
implemented urgently by advertising agencies, since
these have had to respond to communication needs of
customers even on this front [51]. A significant number
of advertising agencies were not, from these studies,
proactive in relation to the theme of skills required for
this purpose and were not in a position to offer advice
and design as part of their services for customers inter-
ested in communicating through the emerging media. On
the other hand, again from this work it is shown that the
Internet can be perceived as a key element of agency
services [52], but the development of these activities
may be seen as not integrated in their structure9.
The organizational profiles required by enterprises in
the online media market often provide figures that are at
the same time sensitive to issues of communication and
marketing and “network fans … with analytical capabili-
ties related to the use of mathematics and modelling…
but also creative…”10. These figures must develop, next
to familiarity with the tool, even a semantics attitude,
given the importance of the size of the signs and mean-
ings of words. Indeed research on the Internet occurs
primarily through “queries” made by network users
through “keywords” that become a real product. Those
who should interpret them to streamline processes must
refine attitude to understanding news reports, an ability
to immerse, to reproduce and sensing mechanisms of
navigators to improve conversion rates by improving
conversion rates in contacts and sales (Ctr or
check-to-rate) which has already been referred to a key
resource of an agency that has to earn for the customer
and itself on the optimization process of conversion is
the expansion of the database of keywords and its con-
tinuous updating.
The commercial or account figure assumes in these
companies a growing importance. This is a figure that is
to accompany the advertiser in the network, taking on a
key role in communication between client and internal
staff. This brings the online communication agency to
seek integration into its organization of professionals
who have matured sales capabilities with potential cli-
Assume then importance the complementarity with the
resources of more traditional communication agency,
which can continue to play for their clients a role as con-
tact person in privileged communication processes over-
all, by developing a capacity for management of new
forms of communication through growth processes (in-
ternal or external) in the on-line media market.
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