Clicks, Blinks, and Online Advertising

Streaming and rich media promise to make online ads more appealing, engaging, and effective. But lots of folks honestly object to advertising. It can be an emotional issue. Personally, I have nothing against advertising -- unless I feel it has something against me. That's when my objections start simmering.

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By Nico Detourn (TMF Nico)
November 10, 2000

Like it or not, chances are an advertisement is right now competing with these words for your attention. Much closer than peripheral, it's right there, just the slightest eye adjustment from the focus of your attention. Online advertising has also been the focus of attention in much of the year's analysis of the Internet. Is it growing? Can it grow fast enough? Is it really effective?

Online advertising has been cast as the principal villain in the dot-com melt down. It's been the handy explanation for failed companies whose executives, under different circumstances, would have had to find something else to blame. Even the Net's mass-appeal giants, Yahoo! (Nasdaq: YHOO) and America Online (NYSE: AOL), feel the pinch of the great online ad slowdown, although the overall strength of their businesses give their management teams a broader dance floor on which they can skirt the extent of the problem.

DoubleClick (Nasdaq: DCLK), which as the world's largest ad services firm tracks these matters as closely as anyone, sees bumpy roads ahead, at least in the near term. But online advertising works, the company's CEO says, which seems reasonable enough, given industry estimates of between $8 billion and $10 billion in online ad spending this year, roughly double that of 1999. He also says it isn't going away, and on that we can be fairly certain. What are advertisers trying to do online?

Clicks vs. blinks
Almost two-thirds of online advertising, 63%, is spent on ads aimed at generating awareness for a brand and building its position. Such ads make up 54% of all ad online impressions. Research released this week by Jupiter Media Metrix (Nasdaq: JMXI) also says that only 28% of all online ad impressions are aimed at driving traffic to an advertiser's site, and only 17% are trying to directly drive sales. So for most online ads it's not the clicks that count, but the blinks.

Leading online advertisers have "already drifted away from the click-through mentality," says Charlie Buchwalter, VP of media research for Jupiter's AdRelevance division. The Internet will increasingly be used for building brands, for which the direct response of the click-through is "not an appropriate metric," he says. Instead, streaming and rich media will be used to make ads "more appealing to all, especially traditional companies who have mastered offline brand management strategies.''

"Powerfully compelling"
Jupiter's projection will warm the boardrooms of Internet companies who depend on selling ad space, and who've been waiting for traditional, more established and stable companies to pick up the slack of the failing dot-coms. Right in line with this thinking were separate announcements this week from CMGI's (Nasdaq: CMGI) and Excite@Home's (Nasdaq: ATHM) Enliven unit of products to help companies to produce more elaborate interactive advertising.

TV quality images and Macromedia (Nasdaq: MACR) Flash content allow ads that Excite@Home calls "fast and engaging" and 1stup calls "powerfully compelling." Importantly, interactive features, including pop-up windows, targeting, and response tracking, can be incorporated into existing television-ready material, making it easier to develop consistent cross-media campaigns.

Sounds good. But is it really as appealing and compelling for users as it is for the advertisers? Does that even matter?

You talking to me?
It's often said that the ads are the best things on television, though that's usually by way of criticizing TV programming, or as a preface to a general lambasting of advertising itself. It can be an emotional issue -- lots of folks honestly object to advertising. I can definitely understand that. Still, objecting to advertising is like objecting to religion, law, and education, or to art, politics, and pop music. If you're going to object to an institution of cultural transmission, the objection needs to be fairly specific if it's going to be more than just grouchy -- though it will probably always be that.

Personally, in principle, I have nothing against advertising -- unless I feel it has something against me. That's when my objections start simmering.

Advertising can sometimes be offensive, but that's usually accidental in that there is no intention to offend. Practically speaking, though, there is no such thing as an accidental advertisement. As a form of communication, advertising is always intentional. An ad might not speak to everyone who receives it, but it always speaks to someone. Or tries to. The tracking and profiling of users made possible by the interactive medium promise that ads can be better aimed at their targets.

For richer, for poorer
But ads don't only speak to us through their direct messages: Music lover, buy this CD! Investor, choose this broker! Just as in face-to-face real world interactions, how we're spoken to through ads can tell us what an advertiser or a Web site thinks of us, how they see us, and what we are to them.

Now plug the rich interactivity of the online medium into this equation: Unannounced sound effects, heavy bandwidth graphics, resource-hungry pop-ups, browser-crashing Java, hard drive-fragging breadcrumbs. It's easy to see the seduction of these to advertisers, especially when they compare their latest full-budget campaigns to the lowly banner ad. But the appeal to the user, no matter how well-targeted, isn't always as obvious.

The advantages of richer media will be enormous -- to businesses and as well as consumers. It shouldn't be understated. But websites and advertisers need to remember that online is not television, despite the similarities and their inevitable convergence. It defines a more dimensional and personal space and is approached by users with different expectations. They should also remember that while richer media can make a deeper impression, the impression isn't always for the better.

I suspect I'm not the only surfer with many more sites in my "Non-Favorites" list (because of their overly ambitious pages) than sites I return to for the latest in "powerfully compelling" effects. That's something else advertisers should remember as they go about building their brands.

Your Turn:
How do you feel about Web advertising? Do you think it works? Share your thoughts on the CMGI, DoubleClick, or Excite@Home discussion boards.

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