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Online Ads: how they make money, how cookies work and how they affect your privacy

Much of the best content on the internet is funded by advertising. Here we explore how that industry works and how you are its most vital component.



Even if the ad is tasteful, appropriate and harmless, however, it may still annoy the hell out of you. Flashy animations, particularly when they repeat over and over again, can be highly distracting, especially when they’re positioned right beside the text you’re trying to read.
Pop-up adverts now seem to be a thing of the past, largely thanks to browsers’ built-in pop-up blockers. However, such ads have been replaced by expanding ads, which slip out of their frames and obscure the page if you accidentally roll over them with your cursor.

Apparently, though, we’re our own worst enemy. “All the research shows that richer ads are more effective, both in terms of click-through sales and branding effect,” says Martin Pavey, head of creative at Flashtalking. This ad-serving company specialises in what the industry calls ‘rich media’ ads. These include animation, video and interactive elements.

“Ad agencies are always looking for something new to impress both their clients and the public,” Pavey continues. “Static ads were replaced by animated ones and then richer interactive ads and video. Right now… everyone seems to want a ‘social media campaign’ and an iPhone app to promote their products, such as Carling’s popular iPint app, and of course most brands are using Twitter to some extent.”

Social-networking sites offer great opportunities for imaginative companies. Domino’s Pizza recently launched a Facebook app that lets users put an ‘order pizza’ button on their profile pages. The clever part is that the profile owner gets a small kickback from the company for every pizza ordered.

As with all social media tools, however, companies have to be careful. Last year US confectionary giant Mars introduced an unmoderated Twitter feed on its Skittles homepage. The feed amalgamated every tweet with the word Skittles in it. Pranksters soon caught on and the site was bombarded with ‘amusing’ posts, such as, “Eating more than eight purple Skittles in one sitting can lead to cancer.”


A basic skyscraper or banner ad used to be as small as 30KB, but rich media ads can be as big as 2MB. This may not sound much, but if you’re downloading hundreds or even a thousand ads a week, all that bandwidth can quickly add up.

Some ads are bigger still. Take Flashtalking’s recent campaign for the new Alien vs Predator (AVP) game. This was a ‘Homepage Takeover’ of the internet gaming website IGN. Visitors to the site were greeted by a lengthy action-packed animation, which spilled out of the ad’s frames and across the page. The campaign has now ended, but you can still see it here.

Funding the Web: alien predator campaign
↑ Flashtalking’s AVP campaign featured a huge 5MB animated ad

“Clients will always want higher-quality animation in their ads, but larger ads cost more to serve, which can blunt the efficiency of the campaign,” says Pavey. In this case the final ad weighed in at almost 5MB, which is more than all the editorial content on the IGN homepage at any given time.

The AVP campaign is an extreme example, and one that was appropriately targeted at a hopefully appreciative audience. However, the bottom line is we are all paying for the additional bandwidth required to download these ads. Even if your broadband package has unlimited data usage, the pricing for these contracts are based on average use, and such use must therefore include a healthy slab of display advertising.

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