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Pop-Up Controversy Drives Quest for New Approaches

America Online's announcement yesterday that it is making software available to subscribers that will block pop-up ads won't kill the controversial ad format any time soon.

But abuse of pop-ups — ads that appear over Web pages in separate browsers — and the format's increasing ability to rankle consumers are spurring advertisers and publishers to explore formats that offer the direct response effectiveness of a pop-up without the annoyance of ads that block what the user is trying to do.

Clients of Advertising.com, a Baltimore pay-for-performance ad brokerage firm that serves 10 billion impressions monthly, increasingly use full-page ads that temporarily take up an entire computer screen as a Web user clicks from one page to the next, said Scott Ferber, CEO, Advertising.com.

“It's kind of like the pop-up in that it's very big, but it's more like a TV commercial, which is the way consumers currently consume their media,” he said. “People are used to seeing TV commercials in between their content, not on top of it.”

Online entertainment provider UGO Networks Inc., for example, temporarily is intercepting users on its home page at UGO.com with a full-page ad, or “takeover ad,” for the remake of '70s rat thriller “Willard.” The ad's frequency is capped at once per day, so it is served only once to any given user in a 24-hour period.

UGO has used the takeover ad format for about five months, said Alex Loucopoulos, vice president of corporate development for UGO, New York. “Advertisers are finding it very effective, especially when it's relevant, targeted and you're able to frequency-cap it.”

Loucopoulos added that relevancy of the ad to UGO's 18- to 34-year-old male demographic is as important as the vehicle that delivers it.

“If [the 'Willard' ad] was some generic, run-of-network type ad that took up their entire page, I think they would get annoyed,” he said.

Meanwhile, however, the much-maligned pop-up is not in immediate danger of disappearing. Even as AOL rolls out its pop-up blocking service, it employs a subscriber-acquisition pop-up on its Web site at AOL.com.

Though pop-ups can damage a company's brand, they are up to 10 times as effective as other Web ad formats in driving click-throughs and conversions, Ferber said.

“If pop-ups are done appropriately … they are, one, OK by the consumer; two, effective for the publisher; and three, have the best return opportunity for the advertiser,” he said.

Ferber defines “appropriate use” as a publisher serving one pop-up ad per user per day. Moreover, he contends, his clients have found that if they surpass certain frequency caps, the offending ads make consumers less likely to ever return to the site, killing future ad opportunities as a result.

“The problem is that the few are spoiling the benefits for the many,” Ferber said, adding that some advertisers and publishers are too focused on short-term gain.

After serving the same ad three to five times to the same person, “response drops precipitously,” he said. “If you've already seen them three to five times, and you don't have another different ad to show them, you shouldn't show them an ad in a pop-up environment.”

Pop-ups accounted for 3.5 percent of online ad impressions in fourth-quarter 2002 compared with 1.9 percent in fourth-quarter 2001, according to Internet measurement firm Nielsen//NetRatings' AdRelevance service.

The entertainment industry, led by online casinos, devotes nearly 10 percent of its inventory to pop-ups, making it the format's heaviest user, Nielsen//NetRatings said. The computer hardware and electronics industry devotes just under 8 percent of its ad inventory to pop-ups, making it the second-heaviest user. Digital camera marketer X10 leads the way in that category, according to Nielsen//NetRatings.

“Online advertising's reputation has been tarnished by those pop-up advertisers who indiscriminately serve their ads to users uninterested in the product being advertised,” said Charles Buchwalter, vice president of client analytics, Nielsen//NetRatings, New York. “In addition, failing to utilize frequency caps is tantamount to pouring salt on the existing wound of a frustrated consumer. Indications are that many advertisers are succeeding with some pop-up campaigns. While smart advertisers and publishers will respond to their consumers' concerns, pop-ups aren't going to disappear any time soon.”

Meanwhile, AOL reportedly claims its new service is better than No. 3 ISP EarthLink's, which was introduced last year, because AOL's will differentiate between advertising pop-ups and necessary or requested pop-ups, such as those used in banking.

Every time the service blocks a pop-up, it will notify the AOL user with a sound. The computer screen will display a running tally of the number of pop-ups and pop-unders blocked during each session. AOL users also can add sites to an “allow” list from which they want to receive pop-ups.

The service is available to all AOL 8.0 users. It will be delivered automatically to them in the next two weeks or can be downloaded.

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