Brand Building | Internet Advertising

When the Internet was first used for advertising, the watchword was accountability. As visitors to websites could be traced from first sight of an ad to an online purchase (or lack of purchase), it seemed that marketers had finally found an instantly traceable way to account for the success or failure of advertising.

Click-through rates followed by purchase rates were the most important metrics in those early years. Advertisers began to pay the sites they advertised on only for the visitors who actually clicked through, and in some cases even cut deals based on “cost per acquisition” of new customers -- meaning if customers saw the ad but did not go on to buy, the site got nothing.

The Internet, ran conventional wisdom, was a medium that could deliver a direct correlation between advertising and purchasing behavior, and should be used with that correlation in mind: in other words, ads should be a direct call to action. The idea of using the Internet for branding in the way that radio and television have long been used received little attention.

But the premises behind these conclusions were flawed. More recent research has shown that the Internet can indeed act as a powerful tool for pushing brand messages as well as a direct response mechanism. Though click-through rates have declined dramatically (to less than 1 percent in many cases) since the days when novelty kept us clicking, that doesn't mean people are no longer receptive to Internet ads.

Recent research from the Internet portal MSN appears to confirm the value of running Internet campaigns for branding purposes, and shows particular success for those that cross the divide between television and the Internet.

A new study carried out in Germany for MSN by the European Interactive Advertising Association found that the use of online advertising added another 16 percent audience reach on top of the 48 percent reach achieved by television. Similar studies for the UK and France will appear later this year. Market research firm NFO Infratest used a standard audience panel of 2,000 people equipped with paper diaries to carry out the research. NFO Infratest’s questions probed for audience recall of six big-brand cross-media campaigns.

Of the panelists who had seen an ad only on the Internet, 4.7 percent spontaneously recalled it. When they had seen an ad only on television, the recall rate was 21.7 percent of viewers. Recall rates rose to 31.2 percent for those who had seen an ad both online and on television.

Michelle Rutter, head of Pan-European sales and trade marketing at MSN, argues that the results prove that online advertising can work for brand-building: "It's a great frequency builder. People see the ads much more often when they're online as well as on television."

As an example of how this can work in practice, she points to a UK campaign run by McDonald's to advertise its new flatbread sandwich. The fast-food chain switched the last 20 percent of its ad budget to online advertising instead of offline, and raised awareness of the product by 13 percent. This compares with the 2 percent increase in awareness the company would have expected had it spent the same amount on traditional media.

By acting as a booster for ads in other media, Internet advertising could mimic the success radio advertising has enjoyed in recent years. On radio, brand campaigns are now frequently designed to reinforce campaigns that are being led by television advertising or print campaigns.

These findings are backed up by studies from Forrester Research, a technology research company. Forrester has found that online advertising increased people's spontaneous recall of brands to about 4 percent, considerably higher than with either print or television alone.

Intriguingly, Forrester concludes that online advertising seems to work best when combined with conventional media such as print and television: the same research found that combinations of print and television advertising lifted awareness to 9 percent, but combinations of print, television and online raised awareness to 14 percent.

Another fillip to marketers seeking to use the Internet for branding came from this year’s Super Bowl. Not only did advertisers who bought television spots during the Super Bowl commercial breaks experience an increase in visits to their websites that day, but the spike in website visits also continued into the following week.

ComScore, the Internet advertising measurement specialist, analyzed the websites of marketers who advertised during Super Bowl XXXVII. It found that these marketers drew significantly higher audiences to their websites on the day itself, and on the following Monday.

For instance, Cadillac ran five ads during a 3.5-hour period and visitors to cadillac.com jumped more than tenfold over this period. On the Monday following the game, the increase continued, with the site receiving 10 times as many sites as it had the previous week.

Warner Bros. ran a single ad for The Matrix sequels during a one hour time period and another for Terminator 3 for the next hour. Traffic jumped more than 300 percent at each site, and the sites gained between four and six times as many visits on the following Monday as they had on the same day a week earlier.

Also on the Monday following Super Bowl Sunday, Reebok, which advertised during the event, saw its site traffic increase 308 percent compared with the previous Monday.

In further encouragement for Internet advertisers, the ComScore survey found that one-third of respondents reported using the Internet just before, after or during the Super Bowl. The number of searches on sports-related topics also leapt markedly during the game.

As far as branding goes, advertisers may also like to consider the extended reach that online ads offer, adds Andrew Rolf, creative director of Internet consultancy Hyperlink Interactive: "There are some sections of the population, such as young people and hobbyists, that you cannot reach with conventional media or whom it would be too expensive to reach with TV. The Internet is a good means to seek out niches."

Of course, some ads are more powerful than others -- and some Internet ad formats just downright turn users off. When AOL announced last year that it would stop using pop-up ads on its service, it marked a quiet turning point for the online advertising industry. AOL's president, Ted Leonsis, said that pop-up ads "annoy the customers." More traditional forms of online advertising like banner ads can still attract the desired attention when done well, and new formats that take up greater "real-estate" on the viewer's screen should produce better results than pop-ups, according to AOL.

Though AOL has since posted the biggest loss in US corporate history, the company is hoping to draw a line under its bad performance and is looking to growth in the Internet advertising market. According to analysts, the outlook is good: Gartner, a technology research company, predicts expenditure on online advertising will grow to US$ 15.4 billion by 2005, from just under US$ 10 billion in 2002. Rudy Grahn, analyst at industry research company Jupitermedia, predicts: "By 2007, we believe online advertising could capture between 7 percent and 9 percent of all ad budgets, which represents brisk growth."

As the instant accountability of Internet advertising and its branding potential becomes apparent to marketers, we can expect to see new and more creative campaigns take up a greater share of that increasing spend.

[17-Mar-2003]

Fiona Harvey is technology writer for the Financial Times newspaper.


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