In the conventional world, ad agencies have uncorked all manner of gimmicks to get consumers to buy their clients’ products. Most campaigns bring satisfactory results with tolerable ads, even though some advertisers clearly think we have the intellects of oysters. Nonetheless, there’s no denying that print, radio and TV advertising has enjoyed considerable success.
Advertising on the Web, however, has been a different story, not that there haven’t been some notable successes. But the magic potions that work so well in the conventional world have yielded only tepid results for business advertising in Cyberspace. Why?
First, people on the Net have far larger intellects than advertisers think they do. Second, unlike TV ads we have to sit through and magazine ads we have to flip through, we can completely ignore online ads, and often do. And third, we can be far more discriminating about which ads we want to look at.
What follows is an explanation of different types of banner advertising models and how those who do the strategizing are mixing and matching them in a desperate effort to keep the ad banner alive.
Impressions. The first ads to appear on the Web, and many of those still appearing, were designed to build brand. Every time a site visitor goes to a page containing an ad, that visit is considered a “page view” or “impression.” (There are slight differences between the two, but for the purposes of this column they’re similar enough.)
Fees are earned by sites posting ads based on CPM (cost per thousand) methodology. CPM rates vary widely, from a low of a few bucks per thousand to highs of $200+ per thousand.
Clickthroughs. Also called “clicks,” these get prospective customers into the sellers’ cybershops, but they haven’t translated into sales as readily as advertisers want. In many cases (depending on which products or services are being sold), it can take 30 or more clicks before one sale is consummated.
Fees are paid to ad-posting sites for each click. But unless that site gets a lot of traffic, offers ads from a number of different advertisers and derives revenues from other sources, click revenues alone won’t keep it in business for long.
Actions. These have become the preferred responses for many advertisers. The site posting the ad gets paid each time a visitor clicks on a banner, then fills out a form, requests a catalog, etc. The same applies to sales leads and inquiries. But this can be a real crapshoot for the ad-posting site. It often has to augment its own content to further encourage an action. To see a great example of how this works, visit www.jackpot.com.
Sales. Obviously, this is the goal of all advertising. A click leads to the advertiser’s store and buys something there. The ad-posting site nets a per-sale fee. As with actions, that can mean augmenting its own content to encourage the visitor to buy.
Custom and Hybrid Packages. These involve using combinations of the models above, and may well be what make or break the ad banner. Without a profitable synergy for both advertisers and ad-posting sites, it’s back to the drawing board for a whole new approach.
Article – Copyright 2002 James H. Hyde. Syndicated by Paradigm News, Inc.
