Web Ads Upend Industry Practices

Interactive online ads have grown into a key component of marketing and branding campaigns, challenging television and radio for ad dollars
Search isn't the only area taking off. Video advertisements are topping media plans as broadband adoption expands and Web surfers become increasingly comfortable downloading videos. Video ads work, says Gerard Broussard, senior partner and director of media analytics at mOne Worldwide, an interactive media agency. One mOne client recently repurposed an ad made for television to be broadcast over the Internet only. Sales increased by double digits, and, on average, customers saw the ad four times before taking action.

Web advertising will always evolve, mOne's Broussard says.

Web advertising will always evolve, mOne's Broussard says.
Because the Web delivers more-precise information about where, when, and how many customers respond, advertisers can research the best opportunities for running an ad. "This is about fine-tuning the communication with the customer to get the most out of each marketing dollar," Broussard says. "We're engaging in a study where we try to evaluate the most effective click on the search result to see where someone is likely to convert to a customer," he says.

What's different with digital media is that customers have more control than ever over whether ad messages reach them at all. That's why things such as pop-up ads are long out of style, Stuart says. And ad-blocking software such as Trend Micro Inc.'s AdSubtract and the Adblock extension for Mozilla Firefox are making it harder for publishers to guarantee ad visibility even when ads are built into the page. So the industry is working to keep the irritation factor to a minimum by reducing clutter on Web pages, says DoubleClick's Bruner.

"In many cases, publishers are responding to user annoyance at distractions and moving toward fewer, more-impactful ad units," he says, such as single "skyscraper" ads that run the length of a page. "It's a win for the consumer because there's less distraction and for the advertiser because these units demonstrate better ability to click through and have more brand impact."

Fewer ad spaces also mean online real estate is getting scarcer. Couple that with the increasing shift of ad budgets toward online marketing, and the publishers in the field are suddenly sitting pretty. Recent earnings reports prove that Web powerhouses such as Google Inc. and Yahoo Inc. are capitalizing on their ad-based business models, and the lure of the Web is putting them in charge of the game. It has become a seller's market, a fundamental shift from a few years ago when online ads were considered cheap advertising, according to a recent DoubleClick whitepaper on Internet advertising.

That doesn't mean Google will stop innovating, says Patrick Keane, head of sales strategy at Google. The company last month said it would improve its search sponsorship offerings by letting advertisers have more control over which of its sites their ads appear on, and it also would offer advertising by association. An advertiser of golf equipment, for in- stance, could target surfers that search for financial news because people reading financial news often also are interested in golf. "This allows an advertiser to expand upon relevancy and get into a new category," he says.

Staying fresh and affordable is critical for publishers, even if they're in a good position, mOne's Broussard says. "They don't have an oligopoly for Internet demand, and it's a medium that may get too overpriced, so publishers will have to stay on the humble side," he says. Plus, publishers know that today's windfall may be gone tomorrow. "This industry is always hungry for change, so it's always going to be evolving."

And it has to keep on changing to keep the customers from getting bored. That quest for innovation is what keeps OgilvyInteractive's Goodman busy. "The interesting opportunity is how we can continue to evolve interactive advertising to engage consumers in more interesting ways," he says, such as video and rich media. "The more performance we get out of a new technology, the more we can build on that learning to take it to the next step."

The Internet hasn't only seen continual evolution and innovation, it's also sparking change across the entire advertising market. Online, advertisers can see exactly who's looking at their ad, in what context, and what action they're taking. In the offline world, advertisers have based campaign success on less-definitive metrics. That's starting to change, says DoubleClick's Bruner. "Marketers are demanding more accountability, and that's reshaping all of advertising," he says. "And traditional media measurements aren't good."

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