Here's the indiscreet, telemarketer-esque question you need to ask yourself when fielding a Web advertising campaign: What are you selling?

Are you trying to drive traffic to your site, to sell your product directly through the ads you run, or just to generate awareness about your company, product, or Web site?

The good news is that you can do all of these on the Web - often at the same time!

Branding and Awareness Whether you're launching a new product or just trying to increase an existing product's visibility among your target audience, you can do it on the Web. An MBinteractive study done for the Internet Advertising Bureau shows that users who have viewed your banner are extremely likely to come away remembering it, often positively.

Direct Response This is another of the Web's major strengths. Whether it's sales, leads, or raw traffic you're looking for, it's fairly easy to get hard numbers quickly on any of these from your Web campaign and to calculate the return on your advertising investment. And because the Web works for branding, you're getting an added benefit even before the user clicks on your ad!

Once you've decided what combination of these two objectives you're trying to achieve, you'll be better able to evaluate which sites, which units, and which prices are right for your campaign. Why? Well, if you're holding sites responsible to your direct response goals, you're probably looking for a pretty strict return on investment.  

Who are you trying to reach and how can you find them? What do you know about your desired audience/customer base? How well do you know your existing audience, or the audience you're trying to reach? Because the Web is incredibly diverse, you'll want to make sure you get the most for your dollar.

Affinity: Content is king The Web's enormously diverse content is the best place to start. If you're working for a big ad agency or have a large corporation as your client, you could start by using a subscription-based tool like @plan to research which sites meet your desired demo-, webo-, and psychographic criteria. But since this probably isn't you, start with the freebies and figure out which sites feel like the best matches for your product and message.

While advertising networks like DoubleClick, 24/7 Media, Burst, and others can help you target almost any audience you want, you might also have a hunch about other sites that would be good for your product. If you're just looking for a list of the most visited sites on the Web or want to get a feel for the online landscape, free lists like 100hot will give you a basic sense of what's out there. Larger research and measurement companies like RelevantKnowledge, Jupiter Communications, and MediaMetrix also make regular announcements of which Web sites are the most frequented, and you can usually get the basic list for free.

Search engines are usually a good starting point - they've got massive amounts of traffic, are relatively inexpensive, and can help you target the audience you're trying to reach via keywords (that is, your ad for cat sweaters can be served when people search for the keyword "cat"), category-specific rotation (your ad shows up on Yahoo's Business_and_Economy:Companies:Animals:Cats:Gifts page), and other tools.

Also, don't be afraid to let word-of-mouth recommendations from friends or business acquaintances - or a good night of surfing - pre-empt a no-brainer banner buy on the top five sites. If you've got a hunch about a site, by all means test it.

Once you've got a list of sites, get in touch with their sales departments over the phone or via email and find out what sorts of opportunities they can offer you. Many sites have a publicly available rate card, which can give you a basic idea of what rotations are available and how much each site charges

How much do you have to spend? Wow, that's a lot!

Now how can you figure out how to spend it? (And once you think you know, what else should you do?)

Most Web advertising is sold by the same unit used in media like print and television: cost per thousand impressions, or CPM. CPM is calculated by dividing the cost of the advertising unit by the number of viewers and then multiplying by 1,000. If you pay US$20,000 for a banner flight on a site and they give you 1 million impressions, their CPM is $20. Incidentally, my second rule of Web advertising is: Always Do The Math. If you're having trouble turning impressions and dollars into CPM, it's helpful to have a calculator nearby.

To many eyes, the Web's a pretty expensive place with respect to CPM - at least compared to many other advertising media. Outdoor billboards and transit advertising, for example, dip down to $2 per thousand impressions, while the Web varies from around $5 per thousand to $100 per thousand. But the Web is relatively cheap from an "out-of-pocket" standpoint, since you can buy as much or as little as you have money for. Think of it this way: If you're going to buy a nationally broadcast ad on a TV show like Seinfeld that's watched by zillions of people every week, you'll need deep pockets, even if they've got a "cheap" CPM. On the Web - since you're still reaching a more elite demographic than the US population at large - the CPM efficiency is at least on par with television. Rick Boyce (of Wired Digital) has written an excellent article on this topic for the Internet Advertising Bureau, one that I'd recommend highly if you're a geek about media math.

If reaching as many people as possible without any sort of qualification is your goal, it's pretty easy to pick out the cheapest sites that give you the best visibility. But you'll pay more for targeting (if you're selling Windows 95 software, wouldn't you rather not be paying to show your ads to Mac users?), such non-traditional ad units as interstitials (ad pages that come up between links), sponsorships that transcend the norm, and other premium offerings. Be sure to ask the sales reps you talk to whether they have any "beyond the banner" solutions to offer.

CPM is still the currency of the Web, but the success of many campaigns is gauged on "cost-per-click" (CPC), which is the number of clicks divided by the cost of the campaign. Many sites offer cost-per-click buys outright. On the surface, this is pretty simple: if your goal is to pay 50 cents per click, why not just say that outright and find out what the sites can do for you? But be careful when doing CPC deals. Start with a site's CPM and figure out at what clickthrough percentage you'd end up paying the CPC they're offering. Many times you'll discover that buying at a cheap CPM and flighting great banners is your best option and will drive your costs down further.  

Once you've got a list of sites, put together a list of things you're looking for from each of them. While I'm not one to resort to acronyms (except to confuse people), here's one I developed after years of experience and intense, mind-bending media labor: SPACE (for Size, Placement, Access, Control, Expense).

Size - How big is your banner? Unless you're one of those folks who digs small portions, you'll want your banner to be as big as possible; most sites won't give you a discount on smaller banners, so why pay the same amount for a smaller one?

Does the site conform to IAB standards? Since these standards were created in part to make your life as an advertiser easier and cut down on the amount of resizing you'll have to do on any given campaign, it's usually a bonus if a site supports the prevailing standard for Web ads.

Placement - Where on the page will your ad appear? Generally speaking, the most desirable placement is at the top of the page where it's immediately visible. Also, pay close attention to how many other ads are in a given space. Some sites pack as many banners as they can onto their most visited pages; yours will stand a better chance of catching the viewer's attention if it has less competition.

Many sites also offer placements "beyond the banner," so if your goal is to achieve extra impact by using non-traditional units, it's worth asking about interstitials, heavily branded sponsorships, or long-term logo placements. You should also make sure you'll be able to target your ads to areas you think will best suit your message - and stay out of the ones that don't.

Access - Can you check your response daily? Sites with Web-based reporting that allow you to track how your ads are doing on a daily or weekly basis are great, and will help you get the most out of your campaign. (Of course, serving your own ads gives you the best access to that kind of information.)

Control - Does the site offer you control over who sees your message? Here you should be thinking what kind of visitors, as well as how many and how often. If you don't have a Windows 95 version of your software, why pay for Windows users to see your message? If a user has seen your message 25 times already and still hasn't clicked, he may just not be interested. Make sure the site can help you control targeting (who sees your message), reach (the number of distinct individuals who see your advertisement), and frequency (the number of times each user sees your banner). How flexible is the site when considering lead times for flighting (read: putting up) banners, and how tightly can you control your rotation between ads?

Expense - How much does it cost? Really? That's too much! Be sure to get guarantees from sites on the number of impressions, the dates your ads will flight, and the price you'll pay. Always do the math to figure out how much you're paying!

Then, as a little exercise, get out your calculator and see how much it'll cost you for each lead if you get a one percent clickthrough on all your ads. Seem like a good deal? Good! >>

A typical way to negotiate for Web advertising (once you know what you want) is to pick a price and stick to it. And remember, while sales reps are there to help you, they're also there to fill up all the unsold areas of their site with advertising at the best price they can get; don't let them steer you into something you feel strongly won't work.

If you're dealing with multiple sites in similar content categories, feel free to set a goal for them to meet, and let each of them know what the other's offering you. If news site A is twice as expensive as news site B, let A know that you're leaning towards B because of price.

There's one last thing that most people don't devote enough time to: the creative part of advertising. Tiny percentage variations in clickthrough can make an enormous difference in the efficiency of your buy. Make sure to spend a lot of time on the ads you're fielding, and ask the sites you're buying on to do a pre-flight test to find out which ones perform best from the outset. Also, check your statistics regularly and rotate fresh advertisements into your mix. You'll be happy you did.

And remember: Web advertising is far less of a science than most of what you'll read about in Webmonkey, and a few basic concepts will take you a long way.  

More Online Advertising Resources:

Internet Advertising Bureau - Leads the way in establishing standardized advertising specifications and Web ad measurement and analysis.

CommerceNet - Industry consortium dedicated to promoting commerce on the Net.

CyberAtlas - A handy "desk reference for Web marketing" from I/Pro.

NUA - A great resource for national and international data on almost anything you could want to know about Web research, business, and marketing.

Online Advertising Forum - A good general resource with links about almost every Web advertising-related issue, from comparisons of ad servers to the latest ad research.

Clickz - A good resource for getting up to speed on interactive agencies, online ad networks, and other related topics.

Advertising Age - Advertising Age magazine online. Check in daily for their interactive media and marketing section.

Jupiter Communications - Home to a wealth of information and insight on a variety of Web businesses.

Measurement Companies (most of these cost money, but you can get good general data free on their sites):

@plan - Uses a large panel of Web users to give detailed information on demographics, usage, and other topics.

I/Pro - Literally "the Nielsen of the Net," I/Pro measures and audits traffic and provides advertising campaign analysis tools, among other services.

MediaMetrix - Producers of the PC Meter report, and others.

NetRatings - Fee-based weekly reporting on Web traffic, based on a projection from about 2,000 users.

Relevant Knowledge - Reports monthly on Web traffic and usage based on a projection from a larger sample than that used by NetRatings.

Mailing Lists:

Online Ads - Moderated by Richard Hoy of the Tenagra Corporation, it's a lively, informative list.

Iconocast - Michael Tchong's humorous and insightful weekly newsletter. Read this if you want to be up to speed on industry analysis and all the latest gossip.

I-Advertising - Another valuable many-to-many Net advertising discussion list.