NEW YORK — If offline advertising had the same constraints and were held to the same metrics as Internet advertising, print and television would fail, said Kevin Ryan, CEO of ad services firm DoubleClick Inc., in his keynote address to 400 attendees of Jupiter Media Metrix's Online Advertising Forum.
“We've been defending the [low] click rate, when we should be comparing it to click rates of print and television,” Ryan said. He added that obviously those measures are not available, but that if they were, they would show the Internet's relative value as an advertising medium.
“Measuring click throughs is like taking television and measuring how many people saw an ad and literally picked up the phone and bought Crest toothpaste,” he said.
Ryan also reiterated some of the results of a brand impact study the firm conducted in the spring and released last month. The study concluded that Internet advertising does build brand awareness and that bigger ads are better.
“If I owned a site, I would absolutely put a large rectangle on every page,” Ryan said. “If The Wall Street Journal tried to have advertising on only 20 percent of its pages, I would say that's a business model that probably doesn't work.”
Ryan also commended CBS MarketWatch for its recent announcement that it would no longer supply click-through reports to advertisers unless they asked for them.
He said, however, that ads served by DoubleClick last week drew 50 million click throughs.
“Internet advertising drives a staggering amount of traffic,” he said.
To move forward, Ryan said the Internet advertising industry must learn more about the effect of Internet advertising frequency on branding and the effect of online advertising on offline purchasing.
He also said the industry must figure out a way to remove “friction costs.” Offline, 90 percent of the money in an ad buy goes to the content provider. Online, only 50 percent to 65 percent goes to the content provider.
“If that were the model on TV, there's not one network that could make money,” he said.
When asked what types of companies understand online advertising, Ryan named the auto industry. “They don't spend a second thinking about whether it works,” he said. “They just know that half of the people who buy cars are online, so they have to be there.”
Ryan also said performance-based advertising is not the future of the Internet.
“It's simply a way to drop prices,” he said. “It works right now, but it's an artificial and simplistic way to measure results. You want to make people feel good about your car and want to buy it.”
He added that he is pessimistic about the market overall.
“I don't see anything positive happening there for at least six months.”
