Fewer advertisers and sliding click through rates are prompting a
drastic rethink on the web's ubiquitous billboard as marketers look
beyond banner advertising for a more effective sell.
In place of the tried and failing banner, online media owners are
pumping up the hype. They are encouraging the kind of intrusive Las
Vegas-styled distractions in an effort to lure ad dollars amid the
current crunch hitting online advertising.
On a typical web page, the banner ad has commonly been squeezed into a
rectangular strip positioned at either the top or bottom of a page.
However, with fewer advertisers taking an interest in the online banner,
web publishers are opting for braver, louder advertising to grab
consumer attention.
But can this latest initiative succeed now that surfers view the banner
with more disdain than interest?
ACNielsen eRatings.com, managing director, Hugh Bloch, says the banner
has taken the brunt of the blame for the flattening growth in online
advertising.
"My personal contention is that this has been somewhat unfair and that
the banner has been scapegoated and maligned more as a victim of
circumstance than as a result of any substantial and objective
evidence.
"That is, like any advertising, there are poor and good campaigns. Our
data is full of evidence that shows that like any advertising, creative
banners, properly targeted to the right audience on the right sites can
be extremely successful. If we take the most developed market from both
an online advertising and measurement perspective, the US, there is
evidence of many banners with click rates of well over 60 per cent, the
kind of 'response' rates that advertisers in other media can only dream
of," Bloch says.
For the first time since 1996, the Internet Advertising Bureau (IAB) in
the US has introduced new ad sizes. The idea is to bring out new online
ads that are bigger and bolder. More importantly, the new shapes and
sizes will be attractive enough to lure traditional advertisers to the
web.
The change is clearly a sign of the times. It comes as internet
companies try to survive the current lean times in online advertising,
which remains a crucial part of the ecommerce model.
The seven new ads introduced by the IAB include a skyscraper (120 x 600
pixel); wide skyscraper (160 x 600); rectangle (180 x 150); medium
rectangle (300 x 250); large rectangle (336 x 280); vertical rectangle
(2,400 x 400); and square pop up (250 x 250). The ads are significantly
larger than the 468 x 60 banner.
For advertisers, the new ad sizes ring in good news. The additional
space will allow them to illustrate products in a more compelling
fashion. These virtual billboards will also allow users to click onto an
ad without linking to the advertiser's web page. But this in itself
presents an obstacle - an end to the clickthrough metric as an
indication of the web's advertising effectiveness (although media sites
argue this is an unjust measurement tool).
Research, says PricewaterhouseCoopers Asia-Pacific leader for
entertainment and media practice, Marcel Fenez, is another area for
improvement. Rather than measuring the effectiveness of online
advertising just by counting the number of viewers who click on an ad,he
says online publishers need to conduct more research that is commonly
done for other media.
"The medium that can prove itself best through data will attract the
most ad dollars. Buyers need to understand the medium, but
unfortunately, not many understand the internet. At the end of the day,
it is still an education process. Ad buyers need reliability - third
party verification of data - to make spending worthwhile," says Fenez.
One way, he says, is measuring the non-immediate response to an ad, or
the number of people who see it, don't click on it, but visit the
advertised site at a later stage. Web publishers could also look at
measuring brand awareness.
Bloch agrees, "The beauty of the internet from an advertising or
marketing perspective is precisely that it is so easily measured and for
that matter, in real time. This real time feedback means that poor
campaigns can quickly be pulled and replaced with other better
performing ones without the possible wastage associated with other forms
of media.
"That said, it is true to say that not enough research has been done on
the effectiveness of online advertising, one of the reasons for its poor
perception. While high 'click rates' don't necessarily mean effective
advertising (that is, a publisher guaranteeing a near 100 per cent click
rate by offering one million dollars for every click), click rates do
confirm that a banner has been 'read' and 'acted upon'."
Bloch adds that single source panels such as those that combine retail
or television ratings panels with online measurement panels could offer
a way of directly assessing a campaign "with respect to whether or not
it leads directly or indirectly to an online or offline sale or to
'referral' to a particular site".
Sadly, these systems do not as yet exist.
While the new ad sizes are designed to expand marketers' options in
online media, web publishers - the IAB acknowledges in a letter to
member companies - "will have to go through some site redesign if they
deploy the new units".
The bureau adds: "But we believe that adopting some of the larger,
interactive creative units will be for the betterment of publishers and
marketers."
However, industry analysts argue that it is still a risky play. This
potential solution runs the risk of irritating internet users who - it
would seem - are likely to be put off by more prominent product pitches
on their screens. For consumers, it is a daunting thought. In the coming
weeks and months, they can expect to encounter ads that are about four
times the size of typical banners. There are also plans to offer a wider
array of location choices on a page.
According to engage president, Colin McIntosh, the advertising agency
began using larger ad sizes about a year ago for clients such as Nokia
and Digital Island.
"Publishers such as ZDNet in Singapore have been using larger ad formats
and have found them much more powerful for branding. It is always an
advantage to give media buyers and marketers different ad sizes and
formats, especially since advertisers in Asia continue to use online
advertising as a branding medium. Ultimately, larger formats will always
be welcome in the industry," says McIntosh.
Larger ad sizes, he adds, also enable greater creativity, which has been
one of the biggest criticisms of online banners.
Driving the development of new ad sizes is the belief that consumers no
longer pay attention to banner ads. Survey after survey indicates the
internet user is "bored" with the online banner and has "learned" to
block the banner from view.
The crux of the problem is that unlike television commercials or
newspaper ads, online advertisements have essentially failed to generate
sufficient revenues to sustain businesses reliant on ad dollars.
But despite all the excitement and the IAB's efforts to counter the ad
sales drought, advertisers remain slow to take to the new ads. A recent
Jupiter Media Metrix report found that while 25 per cent of ad-supported
websites experimented with larger online banner sizes, less than five
per cent of those sites ran ads that complied exactly with the new IAB
standards.
The researcher also found that the number of unique vertical internet
ads surged by almost 70 per cent in the fourth quarter as sites searched
for new ways to become more attractive to advertisers, who have been
disappointed with response rates to traditional horizontal banners.
But Bloch remains optimistic. He says the new ads are likely to create a
curiosity factor that will aid the effectiveness of the ads. "As with
advertising in magazines and on television, there will be some interest
in and tolerance of (more intrusive) advertising as a result of
consumers' understanding with respect to revenue models.
"However, over time, this is bound to wear off and advertisers and sites
will be forced by the market to take consumers' opinions on
intrusiveness into account, particularly with more intrusive forms of
advertising such as pop-ups or interstitials. Simply, if consumers find
the advertising overly intrusive, they will move to competitor
sites."
McIntosh stresses the need for standardisation. This means that
advertisers can run their ads across multiple sites without having to
execute a different creative work for each placement.
"The only setback is that with a larger file size, pages can be slow to
download for certain users. We're trying to standardise the larger ad
formats for our 400 publishers. But I think it will take some time,"
McIntosh adds.
"Since we started using the larger sizes, we have seen more innovation
among our clients who are keen to try other things. I think the
educational period has paid of. Traditional media buyers understand that
a full-page ad in print is better than a quarter page. This is something
that is logical and understandable to them."
Speaking at an American Chamber of Commerce forum in Hong Kong,
Mercatela director, Joshua Goldman, dismissed reports suggesting the
banner is dead and is an ineffective tool to advertise or brand on the
internet.
"In 1997, banners made up 80 per cent of online advertising. Today, that
figure stands at 50 per cent. Online advertising is more than just
banners, but it is important to pick the right tools that are
appropriate for your objective, as well as to adopt the right
measurement tool," says Goldman.
He urged advertisers to move beyond the banner towards sponsorships,
buttons and interstitials to promote or brand online. However, he
stressed the importance of integrating online ads with offline
campaigns. "Previously, the response from banners as measured by click
throughs was five per cent.
Now it is at 0.5 per cent and the general response seems negative.
"This is partly the misrepresentation of click throughs - also the
novelty factor about banners has worn off, so people may not be clicking
on them as much.
Goldman cites the US IAB Ad Effectiveness Study/Millward Brown
Interactive report, which evaluates the impact of click throughs against
ad exposure on ad awareness. The study found that ad awareness after
clicking on an ad is at 44 per cent, while awareness without clicks is
only slightly lower at 43 per cent. "The increase from clicking on the
banner is slight, but overall 90 per cent of the gain from advertising
this banner was for it to be seen. This is still effective
branding."
Interestingly, a recent report by Myers found almost 85 per cent of US
advertising and marketing companies believed the most important reason
for using online advertising was to drive traffic to websites.
Myers found secondary reasons for advertising online included brand
building, branding and sponsorship opportunities. Meanwhile, web
publishers may have to come to terms with disgruntled consumers as they
feature oversized ads. Sina.com, the first Chinese portal to experiment
with "Messaging Plus Units" has been asking users of its website for
their understanding over giant online ads featured on heavily visited
web pages.
The animated ads were placed at the top or bottom of web pages in
prominent positions, giving the impression they were pictures or
articles to complement content.
Rich media, both McIntosh and Bloch say, is likely to emerge as the
saviour of internet advertising. While the IAB did shy away from
recommending standards on the use of rich media, publishers such as
internet.com have made new rich-media ad sizes ready.
Despite the subtle refinement still needed to the online banner, various
industry players agree the new, larger standardised ads should be easier
to design and easier to sell.
But it remains to be seen whether they will ultimately help publishers
boost flagging internet media revenues.
CLICK RATES ACROSS KEY ASIA-PACIFIC MARKETS (FEB)
Average Click Rate
Country for Top Banners Impressions Unique Audience Reach %
Australia 0.28% 508,755 104,373 2.30
Hong Kong 0.78% 781,892 113,565 6.42
South Korea 0.61% 6,635,920 941,709 7.00
New Zealand 0.28% 215,977 40,591 4.27
Singapore 0.32% 512,148 67,659 8.57
Taiwan 0.32% 2,746,191 456,545 11.31
Impressions - The total number of times a banner has been served to the
web population.
Any web surfer can view a banner many times.
Unique audience - The number of unique people that were served the
banner at least once in the defined time period.
Reach % - The number of unique web users that were served a web banner
at least once in the defined time period, expressed as a percentage of
the total web population.
* Data supplied by Nielsen//NetRatings.
