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Study: Online Ads Focus on Building Brand, Not Clickthroughs

The majority of online ads are geared toward building a corporate or product brand, as opposed to generating immediate click-throughs, according to a study conducted by AdRelevance, a Jupiter Media Metrix company.

The study found that ads solidifying a corporate positioning, building awareness, or spotlighting a product feature or benefit accounted for 63 percent of all online ads, and about 54 percent of all impressions.

Of branding-oriented ads, creatives generating awareness garnered 33 percent of all impressions, followed by positioning ads with 20 percent. Creatives that promoted a feature or benefit of a brand made up about one percent of total impressions.

Hardware and electronics firms were the most likely to use branding ads, with more than three-quarters of their impressions devoted to building or shaping corporate or product identity. Entertainment companies, retail, Web media, automotive and travel also used a majority of their online ads for branding.

The telecom, financial services, consumer goods and B2B industries, on the other hand, focused a majority of their impressions on click-through generation to drive site traffic or sales.

One reason that this might be the case is that online ad inventory is predominantly sold on a CPM basis, rather than CPC or CPA; therefore, there is a comparatively lesser need for creatives geared to generate click-throughs.

And with lingering questions about the effectiveness of impression-based advertising -- based in part on click-through rates' lurking below the one percent mark -- the study's findings seem to indicate that advertisers might be shifting to using Web ads in a way more consistent with how users are interacting with them: that is to say, by creating ads meant to be seen but not necessarily clicked.

"Online advertising is no longer just about click-through. Although industry and financial analysts have relied on click-through rates to gauge the effectiveness of online ad campaigns, the market has finally realized that clickthrough is not an appropriate metric for brand-oriented ads," said Charlie Buchwalter, vice president of media research for AdRelevance. "Leading advertisers have already drifted away from the clickthrough mentality of pure direct-response marketing."

The study came as a demonstration of AdRelevance's new product, AdStrategy, which segments advertisers by ad type -- e.g., awareness, positioning, etc. -- and on which sites they advertise.