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In the past year advertisers have leapt onto the Web, beckoning, cajoling and tempting users to push their buttons.
Through sponsorships of popular content sites, purchases of key words on big-name search engines, and banners plugging contests and offering discounts, advertisers are struggling to convert passing eyeballs into clicks which whisk the surfer to a corporate promotional page.
This spontaneous mouse action is giving birth to a new advertising paradigm, one that borrows from media-buying models of traditional ad venues but which differs from broadcast or static media in requiring the audience to participate in receiving the message.
The job of enticing passers-by to link to the advertiser's site typically falls to the humble banner ad, a small horizontal bar running across the top or bottom of a high-traffic Web page.
Banner ads are posted almost exclusively in the GIF format, generally at around 470 by 60 pixels in size and 72 dpi- though some sites also sport ad icons and other pre-set configurations.
The dimensions are established by the site publisher, along with other format specs intended to distinguish the advertising from the editorial content.
Most content sites also limit banner file sizes to around 10 KB, which provides little room for fancy photographic rendering or animation.
Creative souls who insist on complex ideas and art on banners are guilty of hubris- a fairly simple 10-cel animation can add at least five seconds to a content page's download time, inviting the wrath of impatient mousekateers and the termination of the load request with a simple slap on the Escape key.
How to turn this limited real estate into a compelling visual message is a question for which few creatives have found answers.
Still a couple of rules of thumb have already emerged.
First, copy is more important than visuals, since text communicates more directly, generally needs smaller files, and does not suffer as much from low screen resolution.
But the banner ad is no place to get wordy: a simple tag-line that inspires curiosity or chuckles is all that a viewer will take time to read before scrolling on.
Second, contests, promotions and other visitor-reward marketing strategies are more successful at getting clicks than flashy visuals that just transport the traveler to a corporate site. “Animated GlFs on banners, so what?” sniffs Lindsay Fraser, an Ottawa Internet consultant and co-author of the book How to Advertise on the Internet.
“It might draw my eyes, but a million-free-air-miles contest by Cathay will make me click.”
The banner ad is the pick-up line; after the initial attraction, it has to keep the viewer's interest by promising some intrinsic value on the follow-up page, even if it is just humour. Says Fraser, “The greatest problem in banner ads today is not the creative work involved or where the banner is placed, but what people get when they click on it.”
“Everyone is looking for what's clever and unique, but what is really remarkable is that it has taken creative people over a year and a half to apply their marketing savvy to this environment”, says Fraser.
On the other side of the Web advertising equation are the big search engines and electronic zine sites that provide the infrastructure and the audience for promotional messages. However, unlike print, which has a solid legacy of auditing, demographic profiling and fixed rate-card structures, Web content sites are groping around for reliable data about their users on which to base their pitches to advertisers.
All but the busiest content sites, such as the digital publication c|net or the online sister of the US news channel CNN, are getting little income today from ad placements.
Facing sceptical clients, many offer ad space for nominal fees in hopes of demonstrating to the online community that they are open for business.
The shaky financial situation of most content sites is highlighted in the results of a recent Forrester Research study, which concludes that Web publishers will continue losing money for several years.
After the year 2000, however, the company predicts that the picture will brighten, at least in the US: by then, 20% of Americans will be online, creating a critical mass that should draw enough ad revenue to start putting publishers into the black.
“Content providers who joined the Web gold rush [over the past year] find themselves tumbling down a long, dark mine shaft,” says Bill Bass, senior analyst at Forrester. “It will be at least four years before they see a return on their investments.”
In an effort to build an advertising base, some sites are supplementing banner rentals with other promotional opportunities. ESPN's Sports Zone, for example, signed up Pizza Hut as a sponsor for a basketball pool. ClubMode, an interactive Web soap opera set up by Ottawa software developer Corel, offers to write select clients' products into the story.
When it comes to banners, however, Club Mode is typical of Web publishing today in applying a very flexible ad payment structure. In fact, currency often does not change hands at all and ad contra deals with other content sites are common scenarios. Club Mode, for instance, runs a banner for a Vancouver electronic zine, which returns the favour by plugging Club Mode.
Brett Glover editor of Vancouver.com says such “back-scratching” relationships help fledgling content sites demonstrate that they welcome advertisers.
“Currently we are not charging for our banner ads. We are a brand new publication that has undertaken a free ad strategy in order to build credibility for the site,” he declares.
Glover hopes that planting such seeds will eventually reap revenues for the venture, but for now the costs of maintaining the site are borne by its development partners, a group of six corporate supporters that includes the BC Lions football club and CFox radio station.
Like Vancouver.com, most online startups trust that the growing medium, like the tide that lifts all boats, will swell their advertising budgets. And they dismiss predictions that Web advertising in its present form will not last.
But with few players making money, and software already in development that will let browsers block out ads altogether, some agencies and advertisers are wondering if today's banners will soon give way to another advertising paradigm.
One promising candidate is the broadcast-network model adopted by such large ventures as the Pointcast news agent and the planned Microsoft Network/ NBC project.
By controlling the assembly and dissemination of the content, and requiring users to subscribe to the service and log in each time they access it, these services can track users' activities on the system and compile profile of their interests.
The resulting information would represent the fulfillment of many marketers' hopes for the Internet: the ability to tailor their message to individual customers.
Bill Gates is on record as saying that by the year 2000 Microsoft will spend 50% of its ad budget on the Internet. Of course, Microsoft has a particular interest in seeing this marketing approach succeed as it retools itself into a multimedia company.
Others, however, seem to share its enthusiasm. Several research firms that track commercial use of the Internet report advertising dollars are pouring onto the World Wide Web. Though concrete estimates for the overall spending are hard to come by, in 1995, ad revenues on the top 10 content sites topped $100-million-a figure expected to at least double this year.
Leading the way are software, hardware and telecom companies whose products have a natural demographic fit with the medium. Together with financial organizations and media companies, these groups account for more than 50% of the ad dollars flowing to content sites. The rest comes from a mix of service and product suppliers, ranging from cosmetic companies to clothing retailers to food businesses. The bulk of the money is spread among a handful of popular Web destinations, while the rest fight over the scraps with a variety of strategies.
Early content sites that adopted expensive rate schemes in hopes of cashing in on a naive market have found big ad players quickly catching on. Advertisers now demand much more detailed information about the site's audience and their ads' performance, with some even pushing for commission-based schemes that pays the publisher only if the user clicks on the advertiser's banner.
A few Web publishers still base their ad fees on hits (user requests to download a page), but that yardstick has been largely abandoned as a useless statistic. “You used to pay for CPMs [clicks per mille], but it's different now,” says Internet marketing consultant Lindsay Fraser. “Yahoo has dropped its price dramatically and now only charges for click-through [user's access to the page following the banner]”.
Search-engine and index sites are coming up with some unique methods to generate ad revenue, such as selling search strings to advertisers. When the user enters the key word or phrase in a search, the page listing the results automatically displays the advertiser's banner.
A recent query for “long-distance resellers” on Yahoo, for example, turned up a page of listings topped by a banner for the Yellow Pages; another query for ‘modems and peripherals’ brought up a banner for a computer retailer. Such search-string purchases can be an excellent way for advertisers to reach a target audience.
Some services, however, are wading into the murky marketing waters. One approach soundly roasted by the Internet community and greeted warily by advertisers is that of Open Text, a search engine that offers to put paying customers in prominent spots within its search results. A recent query for “sport cars” not only loaded a banner ad, but the top two entries on the list were commercial ventures that paid to be included. By offering to promote advertisers within the editorial content of the database, Open Text risks damaging the perceived integrity of its search results.
What attracts advertisers to search-string purchases is the ability to place their banners in front of eyes actively seeking information on the products or services they offer. This is something few content sites can provide. Despite some claims to the contrary, gathering demographic information on site visitors is virtually impossible unless users are persuaded to answer electronic questionnaires.
Third-party auditors, so vital to the traditional model of mass-media advertising, are struggling to adapt their methods to Web publishing. Today, however, the only hard statistic they can uncover is the number of hits-a measurement whose reputation has been tarnished by often wildly inflated numbers. “All the stats and advertising reports, like Nielsen for example, involve a high level of witchcraft”, says Internet consultant Michael Strangelove. “These are people with a huge vested interest in the apparent success of the Net”.
One middleman that has found an innovative angle on Web traffic auditing is Double Click. It offers to bring content sites together with advertisers, generating ad revenue for the former while offering strategic ad placement for the latter. Using the cookies protocol (see Glossary), the service plans to build a database of user profiles by tracking their travels around Double Click-monitored content sites.
This information could then be used to tailor the ad and its placement to each user's interests. But a cloud already hangs over Double Click's prospects: new versions of Netscape's and Microsoft's browsers will give users the option to not accept cookie files; without a compelling reason to do so, most will likely refuse.
- Hit — User requested the page featuring the banner ad (measured in CPMs, a term adapted from the print world, meaning clicks per thousand)
- Click-through — User clicked on the banner and completed loading the second page
- Impression — Banner ad was placed in front of a desired viewer (based on claims of demographic or psychographic information about site visitors)
- Click per exposure — Ratio of click-throughs to impressions
- Click rate — Ratio of placed to clicked banners; serves as a measure of visitor receptiveness to advertising
- Cookies — An HTML protocol that places a text file on the user's hard drive, through which a site can then identify the user's machine on a return visit. Web publishers can use cookies to customize their offerings to repeat visitors, while some third-party monitors of Web traffic are employing cookies to track users' travels in order to glean surfing preferences and infer psychographics
The top 10 sites by ad revenue as of January, 1996. Last year, the top 10 sites accounted for 75% of the $115-million spent on banner ads, according to Internet research company WebTrack. (The figures for 1996 are expected to be substantially higher):
- lycos.com
- yahoo.com
- netscape.com
- espn.com
- infoseek.com
- pathfinder.com
- hotwired.com
- excite.net
- ZDnet.com
- cnet.com
