Keep the Faith, Net Advertisers!

Those magic words “Click Here” mean different things to different people.

To consumers, they are often just a way to instantly satisfy their curiosity about what lies behind a flashy, seductive banner ad.

To the advertiser, the meaning of “Click Here” varies with the economic seasons. When times are good, there’s a whole lot of clicking going on. When times are tough, as they often were last year, online advertisers sometimes begin to question the viability of the medium.

As with anything else in business, the future of online advertising probably lies somewhere between fiscal Nirvana and doom and gloom. Despite the highly publicized pessimistic prophecies to the contrary, Internet advertising is hanging in there.

Given half a chance, the same old American ingenuity that brought forth such cultural mainstays as direct mail advertising and the 10-second radio spot may prevail online.

Fighting the Good Fight

As last week’s fourth quarter earnings reports from Yahoo! and DoubleClick indicate, Internet advertising is, if nothing else, a volatile, struggling industry.

For its part, DoubleClick defied all the geniuses on Wall Street and broke even in Q4, despite widespread expectations that it would post a loss of two cents per share. However, DoubleClick admits that the current quarter may not fare so well, with possible losses of up to 9 cents per share.

Similarly, Yahoo! says its first quarter may hit the doldrums due to sluggish ad sales, even though Q4 generated earnings of 13 cents per share.

To be sure, Internet advertising has an uphill climb ahead. But as one who has worked through various incarnations of the advertising game, my money is on online ads — so long as industry players know it’s not about the big overnight kill. Everyone involved, including investors, underwriters and analysts, is going to have to give online advertising time to grow up.

How To Spend Ad $$$

Struggling dot-coms will argue they have no choice but to cut ad spending. After all, they will say, so far it hasn’t proven itself a business booster.

Those same companies need to determine if their ad dollars were spent frivolously and unwisely. For example, did it really make any sense for companies like AutoTrader.com, LastMinuteTravel.com and Computer.com to spend up to US$2 million for a 30-second spot in last year’s Super Bowl? The same cash could have been more effectively spread out on a smart combination of online advertising and mixed media use.

Dot-coms need to wise up and realize their ad dollars have to be carefully allocated and diversified among traditional media and strategic online placement. If they place their full faith in banner ads, a vehicle that is clearly still evolving, and then cry because they didn’t realize immediate, stellar results, then shame on them. Likewise if they blow the entire budget on TV ads without supporting the very medium they are trying to promote.

Why not use multiple media to establish strong product identity and branding, and then gradually increase banner ads and online ad spending as the new medium grows? Then, companies can find success advertising online if they follow some basic guidelines.

What We’ve Learned

It’s essential to understand the consumer. Just because online consumers are using a new medium does not mean they have abandoned their old patterns. Once consumers get online they are looking for something — anything — comfortable and familiar.

Also, companies must remember what has worked in the past and build on it, rather than rejecting it as “old media.”

I have had occasion to write billboard advertising over the years, and I can’t help thinking that some of the basic principles of billboard writing and banner ads are the same. In both instances, the advertiser has mere seconds to capture the consumer.

The job is to leave a lasting impression with as few words as possible, using compelling visuals that are memorable but not confusing. It’s as simple as it sounds, but that doesn’t mean it’s automatic.

Industry Retreat

In short, three things will save struggling dot-coms: 1) credibility, earned through quality merchandise and great service, 2) streamlining the business and cutting the fat, and 3) irresistible promotion through creative, well-placed ads.

Unfortunately, many online players don’t get it. In fact, instead of beefing up the ad budgets when they are most needed, Merrill Lynch analyst Henry Blodget predicts online ad revenue for 2001 will add up to about $8 billion, $1 billion less than his previous projections.

Consumers Rule

Remember, the greater percentage of consumers haven’t yet caught up with the technology that online ads like to use. Only about 12 percent have broadband access, and all the fancy graphics and audio in the world don’t mean much if users can’t see it or hear it fast enough.

It is really the computer users who will dictate the rate of growth of online advertising. So, one quarter of one year does not an industry make or break. Even if this becomes a long, cold winter for online advertising, stay tuned and have a little faith. Online advertising is an idea whose time is coming.

What do you think? Let’s talk about it.

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Note: The opinions expressed by our columnists are their own and do not necessarily reflect the views of the E-Commerce Times or its management.


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