New ways to reach users
It’s time companies found a fresh approach to online advertising
66pc of the online population has clicked on a banner ad, with 69pc driven by 'interest in the product', 30pc "liking the ad" and 1pc clicking through "by mistake".
Thursday April 03 2008
ONCE our great escape from the pressures of fast-paced living, our technology, it seems, is turning against us.
In the late 1990s the internet was a content haven, now the world wide web has been taken hostage by an advertising industry growing at more than 50pc each year.
More recently, the friendly little mobile phone appears to be tracking a similar path, with SMS advertising steadily gathering pace and mobile network 3 already selling 'banner' ads on their customers' home screens.
As marketing messages infiltrate our once-beloved gadgets with alarming pervasiveness, ordinary punters have been dragged down an advertising-laden road never envisioned when they first signed up to the digital revolution.
Some advertisers, too, have beaten the path to digital media out of necessity rather than desire, blindly driven forward by a fear of missing out on something big.
As David Sneddon, boss of media agency Group M, puts it, "nearly every client wants to have an internet advertising strategy but isn't always sure what it will yield for them", and so the 'me too' mentality reigns supreme.
Close to five years into the mainstream online ad boom, the industry is ripe for surveying with a critical eye.
Spends have been growing massively, that's for sure, rising by almost 65pc in 2007 alone as advertisers buy into a medium that appears far cheaper than traditional media such as print and radio.
But are advertisers getting their money's worth, since even cheap spots can be wasteful if they ultimately yield nothing?
Research compiled by Starcom for the Irish Independent shows 66pc of the online population has clicked on a banner ad, with 69pc driven by "interest in the product", 30pc "liking the ad" and 1pc clicking through "by mistake".
Some 28pc of those who clicked went on to buy the product, with 44pc of those spending €10 to €50, 37pc spending €50 to €100, 18pc spending €100 to €500 and no-one spending more than €500.
As Starcom boss Craig Farrell surmises "if people do buy (from) online (ads) the lower priced items tend to be those purchased".
Surveys, however, are an expensive way of tracking the effectiveness of online ads, and advertisers typically rely on data generated by online tools.
In the industry's infancy "click throughs were king", recalls Mediaworks' Fiona Field, as advertisers paid out based on the number of clicks landing on each banner.
"Measuring a campaign solely on click throughs can present misleading results," she adds. "Just because an advert is not clicked on doesn't mean the message hasn't been received."
Meanwhile, online social networking sites, in particular, have perverted the market for calculating ad rates based on 'page views'.
"Social network sites tend to deliver unlimited page views but have a very low conversion rate," says Dervilla Mullan, head of Eircom Online. "Their users tend to be more savvy and very good at ignoring ads."
And so the industry has matured, with big online advertisers demanding increasingly sophisticated data to prove whether they're getting their money's worth.
About 15pc of Eircom's total media spend is now directed online, not including campaigns run through Eircom.net which make up about one third of Eircom's online activity.
"We track everything from initial exposure to the completion of a transaction," says Mullan. "If you're buying broadband we can tell if you saw an ad up to 30 days beforehand, even if you didn't click on it."
Fellow telecommunications company 3 is another early convert to online ads. "With online you can measure what results are delivered by an individual ad execution," says 3's marketing manager Susan Branchflower.
"You can be very reactive, putting more money into areas that work, spending more heavily on different elements of the creative."
Getting the creative and the placing right is the biggest challenge for online advertisers, with 51pc of our survey respondents saying they didn't click on online banners because they "find online ads annoying" and another 16pc saying they didn't click through because they "didn't notice" the ads.
"If the ad is too subtle people won't notice it," says Mullan. "Having said that we'd have standards about intrusiveness, we wouldn't support pop ups because you have to respect users and their needs.
"It's a balancing act really."
Another balancing act is deciding how much of the media spend can ultimately go online. Many brands have been growing their online spends by more than 50pc in recent years, behaviour which has more than a ring of unsustainability.
"There's a critical mass as with all media," admits Branchflower, "particular in terms of the physical size of the market in Ireland and the amount you could benefit from spending."
In the coming years, then, brands will have to think more analytically about their online spending, as 'the more the merrier' mindset fades into uselessness.
Another topic set to curb advertisers' enthusiasm for online is creeping inflation, says Field, as websites begin to steadily rise prices after sell outs in the first quarter of 2008, prompting much eye raising in ad land.
Yet for all its challenges, newcomers are still finding their way to the online arena, with ice cream giants Ben & Jerry's dipping their toes into the Irish market for the first time this year. This year will see the ice cream brand embrace main stream advertising in the Republic for the first time, with "most of the spend" going on online.
"One of our initiatives is Free Cone Day," says Ben & Jerry's Emilie lePrince, "we'll advertise that online and people can print off a redeemable voucher."
While the online market is progressing into maturity, SMS linked advertising remains in its infancy but is steadily winning a fan base. Of Starcom's survey sample, 42pc had sent a text message in response to an ad, 40pc prompted by a radio ad, 28pc prompted by a TV ad and 17pc of press magazines.
The reasons for sending the text were very incentive based, with 77pc responding because "it was a competition" and 12pc because they received a voucher/offer/promotion".
Financials have largely lead the drive into SMS linked advertising, along with firms selling mobile phone products like ringtones.
"We advertise our high interest current account on television and as part of that campaign, we incorporate a call to action which asks customers to text for further information," says AIB's Ronan Sheridan.
"The text element enables customers to request a brochure and application form; it also allows us to track the effectiveness of the campaign through the response levels of the text call to action."
While SMS itself may be very much in its incubation period, 3's Branchflower is already plugging a mobile phone advertising vista beyond SMS.
"We are now offering the mobile equivalent of banner ads on our phones," she says. "People see the ads on their 'Today on 3' grid where advertisers can offer them free ring tones or other content. The people are happy to get the free content, the advertisers are happy to get the audience, and so it's a win win."
Ominous sentiments for those consumers who can remember once hearing similar acclaim for internet advertising.
