Sold on Web Ads

By CIOinsight  |  Posted 04-13-2006
Jim Nail, chief strategy and marketing officer at Cymfony Inc., a media-analysis company based in Watertown, Mass., raves about Internet advertising. A veteran of marketing campaigns at such leading advertising agencies as Ogilvy & Mather Direct, Draft Worldwide, Bates USA and Hill Holliday, Nail says that response rates are not the only way to calculate return on investment for Web ads, and advertisers are voting with their dollars. "Online advertising is growing at 20 or 30 percent per year, so marketers are clearly seeing a sufficient return," Nail insists.

CIO Insight: With click-thru rates as low as 1 percent to 2 percent, wouldn't it be correct to say that online advertising is disappointing?

Nail: No. Response rates are immaterial. A consumer may see an ad at 2:40 in the afternoon, but she has other things to do than buy something on the Net at that moment. But the ad raised the desire for the product, and eventually that will lead to a purchase. And if you attribute 100 percent of that purchase to the last market stimulus that the consumer saw, you'd be wrong—you'd miss the complexity in the marketing of that sale.

How should the success of online ads be measured?

Internet advertising can do many things, depending on the campaign, so there are many different ways to measure the ROI from online ads. A TV spot raises awareness, period. Not so with online advertising. Depending on the size of the ad and whether it is rich media or not, depending on whether the ad is behavioral marketing or a keyword search, the goal may be awareness building, lead generation, direct sales or consumer education. You have to be clear about what you want to achieve in the campaign and then measure against that objective. For instance, if you are launching a new product, the purpose of your online advertising will be to raise product awareness. So in that case, you determine the success of the ad by analysis of whether it led to more people knowing about the product, not whether they bought it or not.

What's the value of blogs in an online advertising campaign?

A blog is a terrific tool in talking to a limited set of people who are passionate about a particular topic. In some cases, that can mean a commercial product. If you get lucky, the blog spreads like wildfire and you get plenty of free advertising. But remember, with a blog you are talking to the already converted. The point of advertising would be to expand that pool of customers and prospects and drive them to the blog.

As the next generation of more sophisticated online advertising techniques and programs are developed, how should marketers approach these new applications?

The challenge for marketers in the future will be to find the right level of consumer targeting. It must be specific enough to reach the consumers that are most likely to express interest in purchasing the product. But at the same time, it must not be so narrow that the group of targeted consumers is too small, because the fixed cost of marketing to a small group of consumers can be quite high.

Story Guide:
Online advertising shows its age

  • Banner Year?
  • Word to the Wise
  • Return on Marketing
  • Return Behaviorism
  • Sold on Web Ads