PREMIUM SEARCH Search by job title, geography and build a list of executive contacts
Get ready to be inundated by bigger, flashier, and, yes, more annoying online advertising. Think AOL-like pop up ads, but even more intrusive, since the huge ads will likely be lunging out at you everywhere you go online. At least, that seems to be the fate in store for us if you read through a trio of recent surveys from Microsoft's MSN, ad-network service DoubleClick, and industry consortium Interactive Advertising Bureau (IAB).
Here's the background: Embattled ad-supported online services are doing everything they can to shore up their beleaguered bottom lines. Online-ad sales growth is stalled, following the drop last year in dot-com spending. Once that easy money disappeared, it became apparent how little online services had done to woo traditional advertisers with the virtues of Net advertising, and how much those marketers distrusted the medium.
The last nail in the coffin: A steady decline in clickthough results, the industry's standard measurement of ad effectiveness that tracks how many people actually click on Web-page pitches. That metric seems to have bottomed out at between 0.3% and 0.5% of visitors. Merrill Lynch expects online-ad sales to remain flat this year, at $8.3 billion, instead of growing the 30% to 40% forecasted last fall. Even America Online is finally feeling the strain. On July 18, the company announced the first sequential decline in ad sales in its history.
BRANDED ON THE WEB. Small wonder some of the biggest names in online advertising are waging an active campaign to combat the skepticism (see BW Online, 7/12/01, "Online Advertising: It's Just the Beginning"). MSN, the IAB, and DoubleClick are attacking one major issue head on by conducting research that attempts to answer the question of whether it's possible, using standard online ads, to reinforce a brand or to get a brand message across.
This notion gets little acceptance right now. Many traditional advertisers still think the Net is best suited for direct marketing, such as e-mail blitzes. Other marketers are demanding that deals be structured based on performance, such as how many consumers who saw an ad signed up for free product samples or e-mail alerts. That's a limited market that undercuts pricing for banner ads, which now make up roughly 50% of online ad sales.
So for three months this spring, MSN, DoubleClick, and the IAB conducted separate branding studies. In each survey, a group of people who saw the ads were immediately asked questions online about the product or company. Those results were compared with online surveys of the brand awareness of people who hadn't seen the advertisements.
The results suggest that brand messages can be delivered online. For instance, the IAB's survey of 8,750 people across four sites found that, after seeing a Web pitch from advertisers including Coca-Cola, Bristol-Myers, and online-auction site uBid, consumers' immediate awareness of those brands increased between 2% and 7%, depending on the size of the advertisement on the page.
SHORT-TERM MEMORY. The studies themselves are a step in the right direction. Standardized brand-research surveys, like the ones DoubleClick and Microsoft are now offering to clients, along with independent services from upstarts like Dynamic Logic, which conducted the research for the IAB, are necessary to convince advertisers of the effectiveness of branding online.
However, gaining acceptance for the Web's branding effectiveness will be an uphill battle. For one thing, all of the surveys were conducted immediately after each consumer saw the ad. It's hard to know, then, how long consumers, bombarded by hundreds of marketing messages each day, actually remember what they see online.
The results could also embolden the industry to shoot itself in the foot, since the ads consumers remember the most are the biggest, flashiest, and most irritating kinds. Large rectangle ads or so-called skyscraper ads that run along the side of a Web site consistently produced higher results than traditional banner ads. Ads that used Flash technology to make objects or messages blink on the page were better performers. And ads that popped up in between pages, as consumers clicked from one Web page or site to another, also got the high results. These are also the kinds of pitches that people constantly complain about.
NO SELF-CONTROL? Use of these different technologies, ad sizes, and placements is relatively new. Driven by the need to deliver results quickly, leading online services, including tech-review and news site CNET and finance site CBS MarketWatch, began replacing less obtrusive banners with a flood of bigger, more strident ads at the beginning of the year. Take the X10 camera pop-up ads that are everywhere right now. To make them go away, viewers have to actively close the frame they appear in. That's memorable, but maybe not in a good way.
The question now is: How well the struggling online-ad industry will be able to control itself? It's a sign of the desperate straits Web sites are in that they would risk annoying consumers by accepting aggressive ads like those for the X10. But fueled by the results from these surveys, you can bet we're going to get more of this kind of advertising. "It's highly likely that advertising will become a bigger piece of the online experience," says Barry Salzman, president of DoubleClick's Global Media unit.
That could be a lifesaver for many dot-coms, but an ominous notion if too many advertisers start barraging cranky consumers with the same in-your-face pitches.
Green covers the Internet for BusinessWeek in New York Edited by Douglas Harbrecht
[an error occurred while processing this directive]
Copyright 2001, Bloomberg L.P.
Printer-Friendly Version
