During a scene in the 1983 movie “A Christmas Story,” a young boy named Ralphie listens intently to the “Little Orphan Annie Radio Show,” eager to use his secret decoder to unravel the special message given each week. On cue, Ralphie scrambles to decipher the cryptic code and discovers that the secret message is a reminder to drink Ovaltine.
Marketers have used this tactic since the beginning of time: Fit a product’s messaging into an attractive package and the consumer will become more actively engaged.
Fast forward to July 2000. According to advocacy group Adbusters Media Foundation, Vancouver, British Columbia, the average person views more than 3,000 commercial messages a day.
Though consumers will endure humorous, bizarre and even irrelevant ads on radio and television while waiting for a sitcom or NFL game to resume, online advertisers do not have the same luxury of speaking to a captive audience. With faster modems and the growing pervasiveness of digital subscriber lines, online advertisers no longer have a minute, but rather a split second to make an impression on the consumer.
The upside, though, is that unlike traditional media, the Web attracts people searching for something very specific. When consumers initiate a search on the Internet, they are effectively communicating with potential advertisers. This element of interactivity makes the Web a unique advertising environment. Print, radio and television have a more limited capacity to deliver targeted prospects to advertisers. But on the Web, narrowcasting has never been narrower. Whether the category is health research, online banking, shopping for Mother’s Day or wedding gifts, the advertiser has remarkable opportunities to reach the eyes of pre-qualified consumers.
Furthermore, once consumers have revealed their interests or desires through the terms of their searches, advertisers have the opportunity to convert browsers into buyers instantaneously. Traditional media have always been at least one step away from converting the consumer’s impulse into a purchase.
There is no doubt that Internet usage continues to grow and online advertising dollars will continue to increase. Online advertisers have spent up to $4.7 billion this year, more than double the level for 1998, according to Jupiter Communications, New York.
So, given the Web’s extraordinary potential for advertising, why aren’t companies satisfied with returns from their online advertising, and what is the model of success for all parties — consumers, advertisers and their hosts?
Critics have been quick to point out the problems, but not the solutions: low click-through rates, low recognition/brand awareness and low conversion rates. A December 1999 Jupiter Communications study found that 24 percent of those studied were compelled by an online advertisement to visit a site, compared to 42 percent who had read about a site in a magazine or newspaper.
Moving forward, the most viable online advertising model will come from hosts that offer significant traffic with long duration and high frequency, fine-grade targeting in a variety of advertising solutions and a performance/return-on-investment-based monetization. The advertiser, in turn, must rise to the challenge of delivering greater creativity, relevancy and interaction to the consumer. Gone are the days of one-dimensional media buys relying on banners and buttons; the future belongs to innovative, integrated models that combine compelling content and interactive opportunities for the consumers.
Several methods can be used to make online advertising innovative, integrated and highly targeted. Software companies offering free versions of their applications, downloadable from the Web, are presenting ads from other companies within their applications and sharing in advertising dollars. For some, monthly click-through rates have reached 1.7 percent as opposed to the average 0.5 percent achieved by banner ads, according to Jupiter Communications.
Growing numbers of content sites are offering e-mail newsletters to establish enduring relationships with consumers. Advertisers buying space in these newsletters are seeing click-through rates of up to 15 percent. Search sites are exploring new “advertorial” relationships to provide answers to consumers while monetizing online interactions. Some work closely with advertisers to present highly targeted banner advertisements triggered by keywords in users’ queries. Others offer results to a user’s search ranked in order of the highest-paying provider.
Will the Internet ever present an environment similar to television or radio that holds consumers for segments of 30 minutes or more? Probably not. Convergence of the three media will only give consumers greater opportunities to escape advertising at any given moment. Advertisers and hosts will simply be forced to become more savvy and creative about targeting consumers and retaining them with relevant information and opportunities for engaging interaction.
As we begin to take advantage of the Web’s unprecedented opportunities for advertising, we must combine new approaches with the best of the old. Just like Ralphie and his decoder, online consumers will respond to advertising that sparks their imaginations. Our challenge is to create the incentive to click through with the promise and mystery of what’s on the other side.