Ad Formats and Payment Schemes Study Guide
Ad Formats and Payment Schemes Study Guide

Ad Formats and Payment Schemes Study Guide

Source: University of Minnesota Libraries

Student Price: FREE

An information systems study guide from the University of Minnesota.

Ad Formats and Payment Schemes - Study Guide

Google also serves ads through non-Google partner sites that join its ad network. These partners distribute ads for Google in exchange for a percentage of the take.

AdSense ads are targeted based on keywords that Google detects inside the content of a Web site. AdSense and similar online ad networks provide advertisers with access to the long tail of niche Web sites. Ad networks handle advertiser recruitment, ad serving, and revenue collection, opening up revenue earning possibilities to even the smallest publishers.

​Web ad formats include, but are not limited to, the following: image (or displayads(such as horizontally oriented banners, smaller rectangular buttons, and vertically oriented skyscraper ads), rich media ads (which can include animation or video), and interstitials (ads that run before a user arrives at a Web site’s contents).

In addition to cost-per-click, ads can be sold based on the number of times the ad appears (impressions), whenever a user performs a specified action such as signing up for a service, requesting material, or making a purchase (cost-per-action), or on an exclusive basis which may be billed at a flat rate.

In-game advertising shows promise, with successful branding campaigns run as part of sports games, through in-game product placement, or via sponsorship of casual games, or in brand-focused advergames. A lack of standards, concerns regarding compatibility with gameplay, and the cost of developing and distributing games are all stifling the growth of in-game ads.

Discussion Questions


​On a percentage basis, how important is AdSense to Google’s revenues?


Why do ad networks appeal to advertisers? What do they appeal to content providers? What functions are assumed by the firm overseeing the ad network?


What factors determine the appeal of an ad network to advertisers and content providers? Which of these factors are potentially sources of competitive advantage?


Do dominant ad networks enjoy strong network effects? Are there also strong network effects that drive consumers to search? Why or why not?


How difficult is it for a Web site to join an ad network? What does this imply about ad network switching costs? Does it have to exclusively choose one network over another? Does ad network membership prevent a firm from selling its own online advertising, too?


What is the content adjacency problem? Why does it occur? What classifications of Web sites might be particularly susceptible to the content adjacency problem? What can advertisers do to minimize the likelihood that a content adjacency problem will occur?


​What is the IAB and why is it necessary?


What are the major ad format categories?


What’s an interstitial? What’s a rich media ad? Have you seen these? Do you think they are effective? Why or why not?


List four major methods for billing online advertising.


Which method is used to bill most graphical advertising? What’s the term used for this method and what does it stand for?


How many impressions are recorded if a single user is served the same ad one thousand times? How many if one thousand users are served the same ad once?


Imagine the two scenarios below. Decide which type of campaign would be best for each: text-based CPC advertising or image ads paid for on a CPM basis. Explain your reasoning.

Scenario 1 - Netflix is looking to attract new customers by driving traffic to its Web site and increase online subscriptions.

Scenario 2 - Zara has just opened a new clothing store in major retailing area in your town. The company doesn’t offer online sales; rather, the majority of its sales come from stores.


Which firm runs the world’s largest affiliate program? Why is this form of advertising particularly advantageous to the firm (think about the ROI for this sort of effort)?


List key reasons why in-game advertising has not be as successful as other forms Internet-distributed ads.

​​​​CC BY

​14.5 Ad Networks—Distribution beyond Search and 14.6 More Ad Formats and Payment Schemes by University of Minnesota are licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.

Creative Commons License