Study: There’s Hope Yet for Web Advertising

A new report from Nielsen//Netratings’ AdSpectrum service suggests that the online advertising
sector is not all that bad — and actually could be getting better.

According to the report from analyst Allen Weiner, who tallied Web
campaigns launched in mid-first quarter, the optimism stems from what could
be the long-awaited shift from dot-com cash to traditional ad money.

Those traditional clients not only have deeper
pockets, but they’re also are generally less interested in metrics like
clickthroughs — a perennial thorn in the side of the industry after years
of touting its potential for direct response.

The best news is that while dot-com advertisers still outnumber
traditional companies, offline advertisers now lead in a number of ad
impressions. In fact, new campaigns from offline advertisers constituted
about 40 percent of February’s impressions, while dot-coms only made up 35
percent.

To Weiner, that suggests increased faith in the medium by traditional
advertisers and agencies — an assertion supported by recently announced
online campaigns by Pepsi, Diet Coke and Ford.

“As the year unfolds, it is likely this trend will continue with even
greater emphasis as the percentage of Web advertising offliners grows,” he
said.

In other optimistic findings, 4 percent of the week’s new campaigns uses
larger-than-banner sizes, in keeping with recent efforts by groups like the
Internet Advertising Bureau — which sees larger ad types as being a more
effective branding tool.

For the week of Feb. 25 — roughly the mid-quarter mark, when many ad
buys kick in — Microsoft bought the most impressions, at 334 million.
Following the Redmond, Wash. giant were Classmates Online (258 million),
Equifax (243 million) and Sony (210 million). Yahoo!, AOL Time Warner,
Amazon, Providian Bank, [email protected] and Nextcard also all ran campaigns in
excess of 67 million impressions.

Not everything is rosy however. Despite such efforts to promote the
Web’s branding potential, the newest campaigns remain largely focused on
direct marketing — rather than brand-building.

Less than 12 percent of new campaigns focused on branding objectives,
according to the study — and of these, most were dot-com advertisers. But
Weiner apparently is unmoved:

“Moving forward, it seems logical that online branding has a healthy
future,” he wrote. “As more traditional advertisers move to the Web,
branding likely will follow as a larger part of the online mix. Savvied
traditional advertisers, accompanied by skilled agencies, understand the
need to provide a mix of targeted direct-marketing campaigns along with
image ads and will leverage their media mix to accomplish this dual
strategy.”

There is other mixed findings in the report as well. For one, in-house
advertising still plays a major role in new advertising campaigns, with
nearly 14 percent of new campaigns — from companies like AOL Time Warner,
Microsoft and Lycos — being run exclusively on the advertiser’s own sites.

Newspaper giants, such as Gannett and Knight Ridder, also ran wide-scale
campaigns on their own Web properties.

But that’s not necessarily a bad thing. The oft-maligned house ad —
frequently dismissed merely as a way to fill unsold inventory — is proving
to be of some use. According to the report, house ads not only boost traffic
to the featured sites, but could raise CPMs as a result of the increased
number of visitors.

Despite the mixed bag of news, Weiner said he predicts increased interest
in Web media by offline advertisers picking up in coming months.

“This trend toward offline advertisers migrating to the Web is showing
traction in Q1,” he said. “As the year unfolds, the promise of online
advertising as an effective direct marketing and branding mechanism seems
likely to rebound and lift the mood and morale of those in and around the
Web world.”

Whether this prediction is borne out, especially with big players like
Yahoo! and DoubleClick
forecasting several more quarters of slow ad spending, remains to seen; at the very least, the news is a change from the doom-and-gloom reports running rampant in the
industry.

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