Online Ads: What Works, What Doesn't

By SmallBusinessComputing Staff | Posted June 04, 2002
By Sean Carton

New reports issued by the Interactive Advertising Bureau and PricewaterhouseCoopers show declines in online advertising in 2001 that matched the softness in the overall ad industry. Online ad revenues declined 7.5 percent in Q4 of 2001 and were down 12 percent overall from the previous year.

Not a big surprise. For those of us in the biz who've suffered through the past year, the numbers match what we've been feeling. The useful info isn't the overall decline, it's in the details of the change.

Though consumer ad categories stayed pretty even (down to 30 percent in 2001, a mere 1 percent drop), the biggest jump was spending by media, a increase of four percentage points (8 percent in 2000 versus 12 percent in 2001). Media companies in general did pretty well. The top 50 online media companies showed an overall bump of 3 percent in revenue from 2000 to 2001. The big got bigger and the small fell away.

What's most interesting are the reports on online media formats. Banners were slammed, plummeting from 48 percent in 2000 to 36 percent in 2001. Sponsorships took a hit, dropping from 28 percent of the mix in 2000 to 26 percent in 2001. Interstitials went down a point. Email pretty much stayed the course at 3 percent of overall spending.

The biggest increase was in two often overlooked categories: keyword placement and classifieds. Between 2000 and 2001, keywords jumped from 1 to 4 percent of spending, superceding email. Classified ads leapt from 7 to 16 percent of ad spending - the biggest boost of the bunch.

What does this mean? Overall, the changes taking place (and accelerating, based on what I'm hearing) reflect a growing realization the best return on investment (ROI) and the most effective means of reaching people online take advantage of media that fit with the online experience. As I said last time, advertisers want measurable, direct results. They know the Net provides an answer to the age-old conundrum: "I know half my advertising isn't working, I just don't know which half." They're losing faith in transplanted models such as banners.

Study after study shows consumers are browsing less. They go online with a goal in mind. If they want to buy something, they head online to buy something. If they want to read the news, they log on and do just that. If they want to find something, they head to search engines and don't flail around hoping to luck into a solution. Goal-directed advertising models, such as classified ads and search engine buys, play into this behavior. They put the content people are seeking in front of them, rather than ask them to click away from an activity they're involved in to go down a path that diverges from their goal.

This trend is sure to continue. Our clients demand greater accountability. It's time to embrace those models that provide benefit to our brands and fit the lifestyles (and "Webstyles") of our customers.

Sean Carton is Chief Experience Officer at Carton Donofrio Partners, Inc.

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