Klixxx Home
> Webmaster Article Archives Home >
Business Marketing Articles
(eBiz)
The Resurgence of Online Advertising
by Theresa Lütge-Smith
It seems that the hue and cry predicting the demise of online advertising
has been somewhat premature and overdone. If you look closely, there are signs that online advertising is growing…
If the latest statistics are anything to go by, there is a dynamic revival in online advertising, rather than the supposed decline ecstatically covered in frenzied doom and gloom reporting, by the popular media.
The online advertising and access market will more than double in the next four years, according to the Global Entertainment and Media Outlook: 2001-2005. Price Waterhouse Coopers states that advertising spending is expected to jump from $40 billion in 2000, to $90 billion by 2005. Among the predictions for online advertising is that streaming media will rejuvenate the Internet advertising market. The strongest claim for this outlook is the fact that streaming media appears to be developing as a catalyst for the growth of web advertising.
However, many analysts are tempering these predications with a touch of enthusiastic caution. Jonathan Jackson, Senior Analyst for eMarketer states, "At eMarketer we are estimating a total of $7.6 billion in online advertising for this year, and $10.3 billion for next year. I'm not certain this amounts to 'resurgence,' but we certainly expect to see a steady increase in online advertising spending over the next few years."
George Mannes, senior writer at TheStreet.com, a U.S. based online financial news publication, also sees an imminent resurgence. "I agree there will be a resurgence; the question is when. In the United States, people don't expect the recovery will take place before the second half of 2002." Supporting these views is the prediction that streaming advertising for audio and video programming online is expected to generate $138 million in 2001, according to a report from DFC Intelligence. The report suggests that rich-media advertising will surpass other forms of online advertising within the next five years.
Why are traditional companies turning to new media forms?
Recently, CBS MarketWatch joined the list of sites that have been featuring innovative advertising. The site's homepage displays a fixed-placement banner and skyscraper; advertising Budweiser beer in color and animation. An indication of the resurgence in the online advertising industry can be seen in the number of traditional bricks-and-mortar companies showing an increasing interest in this medium. One of the central reasons for this enthusiastic return to online advertising is its targetability and the capability to be more accurately measured than offline advertising. In other media it is often difficult to determine how much of your site's sales are a result of advertising, while ad clicks on the Internet are easily monitored. This also helps the Webmaster determine which ads are the most lucrative. Clients can also be targeted through content-based marketing with specific ads on sites that are suitable for that particular market.
Marketing strategies can also be executed and controlled more accurately, by using time and day-based promotion for people in different time zones. This marketing tool is presently undergoing further exploration by Webshastra, which is developing behavior-based targeting, wherein you track a consumer's web site preference, and then target specific ads relevant to the individual consumer. Of primary importance, web advertising
allows interactive relationships to be built with clients. This is much more difficult, and more expensive, in other mediums. All of these factors have combined to slowly but surely convince businesses to consider online adverting as an option for an effective marketing tool.
Of course, a chief incentive is that online advertising is much cheaper than traditional adverting. Other reasons why traditional business takes an interest in the Internet are low advertising development costs and it's a cost-effective method to "test the waters" when innovative ideas are launched are niche products are introduced to new markets. Similarly, traditional companies need substantial lead times to adjust ad campaigns and budgets, which will result in a gradual shift to online advertising. While many analysts predict a shift will occur from traditional to online advertising in the near future, this will depend on the necessary infrastructure being in place and more in-depth research being conducted on that new animal, the online consumer.
Larger Advertising Formats
There have been a number of new innovations in the advertising world, in response to the growing interest in online adverting. The Internet Advertising Bureau, or IAB, recently introduced seven new sizes and shapes for interactive banner ads. These new guidelines come in the face of flagging banner ad growth. As everyone knows, banner ad sales have simply stopped being the significant revenue factor they once were. Even though the International Data Corp. states that banner ad sales will reach $9 billion in 2001, this is a very small increase from the near doubling of sales, in 1999. In the third quarter of 2000, online ad spending fell for the first time, losing $138 million from the previous quarter, for a total of $1.986 billion.
Part of the reason for this decline was the shape and format of common banner ads. The new banner ads are much bolder, larger and much more interactive, and in a wide range of shapes including vertical banners, named skyscrapers.
The new banner sizes include two skyscrapers - one, is 120 pixels high, by 600 pixels wide, and the other is 160 by 600. There are five, large rectangular units: a 180-by-150 rectangle, a 300-by-250 medium rectangle, a 336-by-280 large rectangle, a 240-by-400 vertical rectangle, and a 250-by-250 square pop-up. They can be seen at:
www.iab.net/ian_banner_standards/. Ads using the new formats can be found in stories published on News.com.
In addition to the new formats, existing banner ad sizes include a 468 by 60-pixel, full banner, a 234 by 60 half banner, a 120 by 240 vertical banner, and four buttons: 120 by 90, 120 by 60, 125 by 125, and 88 by 31 pixels. The purpose of these new formats is to increase the potential for creativity, and hopefully galvanize the industry to more readily use the Internet as an advertising medium.
The New Force: Streaming Ads and contextual advertising
The need for increased creativity is exemplified in the new wave that is driving online advertising, in the promise of streaming media. Streaming media will make the next generation of online advertising more interactive, and therefore more successful for advertisers. There are a number of developments in the streaming media ad scene. These include audio banner ads, ad insertions in media programming, sponsorship, and
streaming e-mail ads.
There are numerous examples of the use of streaming audio ads. For example, AudioBase uses a Java-based system to stream audio to banner ads. Another good example is the recent use of audio ads by Yahoo! Many of their campaigns have shown a 50% to 500% increase, over traditional banner advertising.
Another approach is ad insertions or streaming media commercials. Streaming audio/video ads are inserted before and after the content. These are also "clickable." A good example of this can be viewed at CNN, where the video content includes an ad that plays at the beginning and at the end of the content.
A third approach is online advertising through entertainment. Honkworm International is a company that uses this approach. They created a series of short animated features, of which the "Fishbar" series is the best known. These animations, which are meant to unobtrusively promote companies and their products or services, are effective as a form of entertainment advertising that attracts clients to the site.
A truly new and innovative means of online adverting is streaming e-mail audio. RadicalMail, a California company, uses Java-based audio that includes animation. This is sent to clients via e-mail. When accessed, the audio part of the e-mail begins playing immediately. One of the important advantages of this method is that no external player is required.
Another innovation is contextual advertising. A company called Ezula (www.ezula.com) has developed a technology called TOPtext. This technique enables the highlighting of certain words on web pages that creates links to the advertiser's sites. Contextual advertising has been around for sometime, but companies like Ezula are taking the concept to new heights. The idea is similar to Microsoft's Smart Tags that were vociferously attacked by the Internet community recently. Contextual advertising can be a bit invasive and not popular in some quarters, but it is a new force to be considered.
The Problem Areas
One of the ways in which online advertising can take a great leap into the future is via video. Video can present advertising in a compelling new way, and has been successfully used in online campaigns. However, the central problem restricting the extensive use of video ads is bandwidth. Until broadband connections become the norm, the full potential of mass video advertising will remain an anticipated future development. "Streaming media is indeed a very exciting aspect of online advertising, and holds the promise of more compelling creativity. The trouble for B2B campaigns is that many consumers are still using dial-up connections that slow the download time of rich media campaigns. On the other hand, while B2B users typically have broadband access, the corporate firewalls
often prevent rich media from being downloaded. Overall, rich media will become more prevalent as broadband access increases," says Jonathan Jackson, Senior Analyst for eMarketer.
A distinct problem with online advertising is the negative perception associated with the medium. Investors and advertisers see a divide between the promise and reality of online advertising. This perception is further influenced by the limitations of infrastructure, and the nature of the medium. Some have suggested the future path is to make online ads more entertaining, and not just an adjunct to the business side of the web. Perception is everything in the advertising world, and advertiser confidence will have to be developed, and supported by conclusive research and statistics before there is a radical change in advertising on the Internet.
Compounding this is the loss of confidence in the effective measurement of the impact of online ads. Measurement through "click-through rate" is in disrepute. While some clients may interpret low click-through rates as evidence of low advertising interest, many analysts point out that this method of measurement is a poor indication of the effectiveness of this type of advertising. Though there are more viable methods of determining online advertising effectiveness, clients often do not have the infrastructure and expensive software to efficiently track results. The tide is turning however, and the most realistic of analysts are leaning toward more optimistic predictions for levels of Internet advertising in the next year.
Online Gaming and Advertising: Present and Future
All of these predictions are meaningless, without that spark of creativity that has characterized the innovations that have galvanized the Internet to date. In this regard, the promise of streaming media can provide grist for the mill of online gaming advertising. The form of streaming advertising used, for example, by companies like Honkworm, could be extremely effective for online gaming advertising.
Imagine the possibilities of rich media ads directed at online gamers, where the viewer can participate in an interactive bet as part of the ad. It is dynamic imagination that is the key element here. Webmasters must be aware of the latest developments in the adverting industry in general in order to take full advantage of the proclaimed upswing in online advertising.
While we wait for streaming media to become a common factor on the Web, there are many things that can be done to improve the present online advertising situation. Jonathan Jackson has views on what can be done to provide better revenue sources for sites. He states that webmasters should "use their online advertising budgets wisely; a general banner campaign may be inadvisable in some cases. We have seen many companies opt for e-mail marketing, rather than banner campaigns, as e-mail offers greater targeting capabilities and a greater ROI."
However, the final cautionary word comes from George Manne of Streetcom. He wisely states that there are no "magical solutions to the problem. The more important elements of the recovery will be advertiser confidence, as supported by research, in the effectiveness and measurability of online advertising."
Successful Banner Advertisements
The trick in creating successful banner ads is to make them stand
out from the crowd.
To increase the success rate of banner advertisements, one should pay
attention to the following points.
Use prompting words such as "click here" or " free."
Create a sense of urgency by using phrases like "Hurry" or " take
advantage while there is still time."
It is important to keep the banner clear and simple, so that the
message is conveyed easily.
Choose colors that make the banner stand out.
Make the banner look interactive. This can be achieved by adding
buttons and arrows.
Banners should be marketed correctly. In other words, place your
banners in areas where people are already looking for similar services
or products. Create your banner for your target audience; with a bit of
careful research you can establish the central elements that would
attract the clientele that you want.
Consider replacing banners every few months to keep the site fresh and
alive.
|
 Printer
Friendly Version
 Submit
Questions or Comments to Klixxx
Need More Information?
Search the Webmaster Articles at Klixxx
Submit
an Article | Link to Klixxx
| Earn With Klixxx Cash
Become
a Sponsor | Advertising Information
Klixxx
Home > Webmaster Article Archives Home
> Business
Marketing Articles (eBiz)
|