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Net ad industry guns for new rules

All-out advertising campaigns are growing in importance for Web publishers struggling against a slump in sales and accusations that online ads don't work.

Last week, Web portal Yahoo proved online ads can do more--perhaps even too much.

Visitors clicking a Ford Motor ad featured Friday on the Web giant's home page experienced a virtual earthquake, a flock of blackbirds that flew across their screens, and a revved-up Ford Explorer that "drove" over content on the page.

Although only a one-day campaign, the promotion was hard to miss. A few visitors with older Web browsers even had to avoid the site because it stalled their machines.

This kind of all-out campaign, although rare for Yahoo, is growing in importance for Web publishers struggling against a slump in sales and accusations that online advertising doesn't work. The message: Unobtrusive banner ads designed to entice readers to click through to a marketer's Web site may have proved a disappointment, but consumers haven't seen anything yet.

"Many people in the Internet industry are striving to prove that online advertising is as viable as other media channels because they're trying to attract a greater percentage of ad dollars from traditional advertisers," said Bill Ratcliffe, president of Millward Brown of Canada, an advertising research company.

The slack attention to banner ads has prompted enormous efforts by Web publishers to augment ads any way they can. Many offer ads enhanced with audio and video and sell larger units or pop-ups, giving marketers ways to reach consumers with practically no limits--evident in the way Yahoo allowed Ford to take over its home page.

Not only are bigger and noisier ads coming to the Web, but industry groups are pushing to create new research to gauge the effectiveness of these brasher campaigns.

So-called click-through rates--or the percentages of people responding to banner ads by clicking through to a marketer's Web page--are the standard measure of whether advertising works. But lately the metric isn't holding water. Typical click-through rates for banners are in the 0.03 percent range, down from early highs of 10 percent.

A growing number of ad industry players including the Interactive Advertising Bureau (IAB), Unicast, DoubleClick and Engage are seeking to debunk the metric of click-through rates in favor of brand-building data that mirrors research long used to justify TV, billboard and radio ad spending.

These efforts are meant to reverse popular thought among traditional advertisers that the Internet is still a Wild West. A study by Association of National Advertisers showed that the majority of advertisers are reluctant to market online because there is no proof of a return on the investment.

DoubleClick launched measurement group Diameter last month to address these issues. Its technology measures how well online ads perform based on brand recall, instead of click-throughs, by working with test groups who take online surveys before and after they see an ad. It released its first finding from the unit last week that showed consumers remembered a brand name more often after they had seen an ad five times.

"Advertisers want to use the metrics they're comfortable with (like those) they're getting in the offline world. That's why we're providing these tools," said Doug Knopper, vice president of Diameter.

Branding vs. clicks
"Brand recall" and "purchase intent" are standard measures for traditional advertisers in mediums such as magazines and television. When the Internet came along, it promised to go beyond those mediums, giving advertisers the ability to target messages to consumers based on their preferences and to hold publishers accountable for the results.

But these advantages became liabilities as the Internet struggled to prove its worth in the last year.

"No other media as part of the ad buy required a response (like the Internet). Because we focused on that interactivity from day one, we've shot ourselves in the foot," said Michael Tchong, editor of advertising industry Web site Iconocast.

Advertisers have become so demanding that they require deals from publishers that allow them to pay based on the number of people who buy a product or subscribe to a service.

"The attitude is, 'If you don't give me the clicks, I'm not buying.' If traditional media were measured in the same way, they'd be in deep trouble. Ninety percent of the ads in Vanity Fair would disappear," Tchong said.

To reverse some of the damage of perception, groups such as the IAB and Unicast's new advisory board are discussing ways to prove online advertising's worth in other ways.

The IAB is conducting research with independent agency Dynamic Logic to establish online advertising as a viable means for brand building. The research is due early this summer.

"This medium is a teenager, and it's starting to question things," said Robin Webster, chief executive of the IAB. "The metrics we've been using are wrong, and it has created a feeling that things aren't working. This is key into getting the confidence back behind interactive advertising."

Unicast established an advisory board of traditional and interactive advertisers and agencies to brainstorm about how to attract more advertisers to the Net.

Online advertising network Engage also partnered with traditional advertising and brand measurement company Millward Brown to measure brand awareness through online surveys. The tests, one of the first from an independent research firm, will help marketers gauge whether a consumer absorbed an ad.

"Online advertising has grown by relying on direct measures such as click-throughs," said DoubleClick's Knopper. "But when you walk through the halls of UPS and Unilever, executives are not high-fiving over a click-through rate; they're high-fiving...if the consumer remembered the product."