Advertising on the Internet is not cheap. At a typical cost-per-thousand of 25, the price paid by advertisers to place their small banner ads in front of the UK’s Internet audience can often run at a premium compared with the price paid for commercial impacts in other, more tried-and-tested media.
And despite the rapid growth in the volume of Internet advertising in both the UK and its first core market of North America, very little is known about how Inter net advertising works – or if it works at all.
As Charlie Dobres, general secretary of the UK branch of the Internet Advertising Bureau, says, the effectiveness of some Web-based campaigns are easier to measure than others.
If the point of a campaign is to lead UK Internet surfers to an e-commerce site to buy goods over the Web, then it’s a relatively easy calculation to measure the cost of banner ads on particular Websites against the value of sales introduced through that site.
Beyond this, justifying the effectiveness of the medium becomes trickier.
Much Internet advertising is not primarily designed to prompt an immediate click-through, a sales enquiry, or purchase, says Dobres.
“If you want to measure the impact of advertising in any other way, for example how the brand was reinforced, we don’t have the tools to measure that. In terms of getting a real handle on testing the efficiency of brand awareness compared to other media, we’re still some way away.”
So how can advertisers on the Internet justify their escalating ad spends?
According to Gordon Simpson, chief executive of UK-based sales house network InterAd Holdings: “We are now at a stage where many publishers and ad servers can give data on different click-through response rates on different forms of banner advertising, so you can use these techniques to improve response rates and improve effectiveness.”
But the claims made for the value of Internet advertising reach far beyond its potency as a direct response medium. And as Simpson and others concede, the new medium still has some way to go in demonstrating its branding power.
“There’s a dearth of good quality research for advertisers, and getting an accurate measure of site use can be very difficult,” he says. “But that’s a measure of the immaturity of the sector.”
However, help is at hand. Last year research company Millward Brown, through its interactive division, published the results of a project aimed at measuring the branding effectiveness of banner advertising in the US.
The research, sponsored by the Internet Advertising Bureau of the US, coincided with a similar exercise conducted in the UK by Millward Brown and sponsored by the Electronic Telegraph and The Network, IBM and Ford.
Both studies gave some support to the proponents of Internet advertising, concluding that good banner ad executions could match or exceed the commercial impact of TV and print advertising regardless of click-through rates (for an executive summary of the main report, visit www.iab.net).
Danny Meadows-Klue, manager of the Electronic Telegraph, agrees that more research across the sector into advertising effectiveness would be useful.
“There’s certainly more research that could be done,” he says. “But the reality is that we are still dealing with a commercial medium that is less than four years old. Things are happening ten times as quickly as they did during the growth of commercial TV.”
Chris Bland, online marketing manager at new media agency chbi razorfish, agrees that “there’s very little for us to go on”. But, he adds: “For packaged goods brands it’s hard to prove advertising effectiveness in any medium, particularly TV which is most used by packaged goods.”
Simon Sadie, former advertising manager at Beeb, the commercial Web publishing arm of BBC Worldwide, and now head of innovations at Mediapolis, agrees that generic studies into advertising effectiveness on the Internet may be too limited, and getting beyond their sell-by date.
But advertisers are rarely offered – or demand – regular proof of advertising effectiveness in any medium on a campaign-by-campaign basis, says Sadie.
“The percentage of advertising even in the mainstream media that is properly evaluated is surprisingly low,” he says. “If there’s an issue over whether Internet advertising is effective or works, then it’s worth remembering that other media like magazines struggle every year to come up with new ways of demonstrating that advertising works for their advertisers.”
He agrees, however, that the issue of effectiveness in Internet advertising has become more important because of the grandiose claims made for it by some in the sector.
Even if the branding power of banner advertising is taken for granted, advertisers and agencies still face a problem of knowing exactly who is viewing a banner ad booked on a particular site.
The waters have been muddied still further by the growing development of “push” technologies by Web publishers, making the tracking and targeting of banner impacts even more complicated.
And the reluctance of many publishers to enforce registration by users on their sites means reliable demographic information, normally demanded by media planners and buyers from other media owners, is missing.
“On most sites publishers think that if you demand upfront registration you risk sending surfers elsewhere. But there are smarter forms of registrations being introduced, and there are publications like the Economist, Telegraph, Times and FT that seem to have no problem demanding registration,” says Dobres.
The lack of registration and third-party tracking studies makes it virtually impossible to target Web campaigns, says Dobres. “But there are plenty of ways to skin a cat,” he adds.
Targeting campaigns by the interest group attracted to a particular Website is one method, says Dobres.
Sadie agrees that much demographic information gained through registration is of limited value.
“There are interesting registration techniques which can be used to extend what we know about visitors to particular sites, and which can provide publishers and buyers with useful tools to get a view on the demographic view of a site’s user base,” he says.
“But a lot of registration data is questionable. Registration is rarely subjected to third party control or verification, and most registration programmes have no mechanism for going back and checking whether the original details entered remain accurate. The best technique for media planning remains targeting sites by interest rather than demographic profile, within some broad geographic areas,” concludes Sadie.
Even the volume of page impressions generated by particular sites is a contentious issue. Gordon Simpson, chief executive of Inter estimates that up to 20 per cent of page requests on some sites can be generated by so-called “robots and spider impressions” – that is, automated page requests from search engines and other programs seeking out references to certain topics.
The consequence of this is that a significant proportion of ad banners may be requested from Website servers without actually being seen by anyone – page requests which should properly be discounted by publishers when selling inventory to advertisers, says Simpson.
Publishers are also developing desktop “tickers” with sports scores, financial and general news headlines which may be downloaded onto the screens of online browsers – alongside advertising messages – regardless of whether or not net surfers happen to be in front of their screens.
“Advertising to people’s backs” is how one observer put this latest phenomenon of Internet advertising. But Sadie, whose client Microsoft recently bought out branding on the Beeb’s World Cup results “ticker”, insists that such push technology is of commercial value – even if it is accepted that many of the “refreshed” banners sold in push forms are not necessarily viewed.
Other push publishers have pioneered sponsorable e-mail up-dates in various interest areas or, as in the case of recently launched British football online newspaper Football365, personalised daily Webpages which can be automatically downloaded for viewing off-line each day.
Such highly targeted and solicited push editorial could, of course, provide a highly effective advertising tool – if and when it is proved that most people are viewing rather than deleting such material on a regular basis.
The problem remains with push services, says Bland at chbi razorfish, is that “it’s easy to see how many pages you are dishing out, but it’s not that easy to know how many people are actually looking at them”.
Such services will only be successful in attracting advertising and sponsorship if they can offer third-party research to validate the fact that a percentage of refreshed pages, e-mails, or daily Webpage downloads are actually being viewed.
Another constraint on the growth of push media in the UK is the high cost of local phone calls which prevents home-based surfers remaining online and receiving regularly updates for refreshed push services.
“We haven’t seen a lot of push media in the UK because we don’t have free telephone charges,” says Dobres. According to Sadie, push will become more important “as people use higher level browsers and as telephone companies offer free local calls which allow people to leave their systems hooked up to the Internet at home as well as work”.
But as the pace of technology continues to outstrip the development of even the most basic industry measures of accountability and effectiveness, it is worth remembering that many clients can live with an element of uncertainty on the Web.
“Packaged goods advertisers are trying to work out what they can do effectively, rather look for top-line straight-forward media value,” says Sadie.
Bland agrees: “The more interesting side of things is not looking at banner advertising as a way of raising awareness as in other media, but using the Internet as a way of developing new forms of ‘contact strategy’,” he says.
“And even if you cannot accurately gauge the absolute level of effectiveness for Internet advertising, what you can be doing is continuously ask yourself one question – is what you are already doing as effective as it might be?”