Lab+5

What is the difference between advertising methods used in the real world and the virtual world. Please explain.

Advertising has always been about persuading potential customers to purchase and consume products and services. In that sense, advertising aims to accomplish this fundamental task in the real and virtual world. However, there are fundamental differences in the economics, demographics, and dynamics between these two different advertising environments. In the real world, advertising is seen in newspapers, television, radio, billboards, and other mediums. Space for these types of ads is typically expensive, and the advertisements need to be crafted in a way that appeals to a larger population. That means the target audience cannot be defined to narrowly, as it would exclude to many potential consumers. Considering that such advertising is expensive, it would not make much economic sense to place an ad about a niche product during the Superbowl, for example.

Advertising online (virtual world) changes all this, as it can be tailored to niche markets, and extract revenue from the long tail. Google is an excellent example of this, as they keep track of your search queries, and your other activities on the web, and then show you ads based on that. Facebook is also doing something similar, as they display ads based on what sort of information you have on your profile. Overall advertisements online can be more precisely defined to attract niche markets that would not be sustainable through advertising in the real world. This is all a result of extensive database systems that basically track peoples activity online (whether they know this or not, its true, think of Google, and Facebook), and then data mining this information to determine the various long tails out there