Will New Banner Ad Formats Benefit Branders More Than Direct Marketers?

When the Internet Advertising Bureau recently announced it was establishing standards for seven new banner ad formats, brand marketers thought their ship had come in.

But direct marketers cast a skeptical eye on the new, larger banners. After all, they said, banners are ineffective, as evidenced by a recent study by Booz-Allen & Hamilton that showed that less than 1 percent of visitors to portals click on banner advertising. Just because the banners are bigger does not mean click-through rates will recover. Does it?

Well, yes and no. Industry observers note that while the new banner formats — including rectangles and pop-ups — offer a larger area for marketers to get their messages across, bigger will not necessarily translate into greater recognition. Still, the potential is there.

What the new banners offer is interactivity. Marketers now have to be more creative in their campaigns if they want to get their messages across, and they have to make greater use of interactive technologies like Flash and other rich media techniques.

But observers note that the larger banners do not address a fundamental flaw in Internet advertising: the need for immediate measurement of an ad's effectiveness. Other forms of advertising, such as television, radio and print, do not offer the immediacy of the Internet, they say, so why should it be expected of banners?

However, proponents of the new format argue that because of the larger size and added interactivity, complicated measurement metrics are less necessary because the format lends itself to providing more information. The user can get more of the pertinent information without having to click through to a Web site, they note.

“The whole online advertising market has become dependent on immediate measurement and complicated reporting metrics,” said Stephanie Herold, vice president of client services at Interadnet, Raleigh, NC. “To put impossible success metrics on one media over another is the symptom of inexperienced brand managers, or worse yet, impatient clients that demand immediate, positive [return on investment] on every activity that occurs.”

Others expect the new banners to be effective branding tools and to help direct marketers at the same time.

Tom Detmer, president and chief operating officer at 24/7 Media, New York, said the new banner formats should help the industry.

“Banners constrict marketers by their size,” he said. “It's been proven by studies that the more active and larger the banner can be, the more effective they are at branding. We clearly have to go to larger banners.”

It should be noted, however, that 24/7 Media is a member of the IAB, as are DoubleClick Inc., America Online, Terra-Lycos and others.

Detmer noted that the new ad formats will help direct marketers because there will be more real estate available to them. Since direct marketing traditionally has been a text-based medium, he said, the new formats offer more room for marketers to get their point across.

“They [direct marketers] tend to be a little more copy-oriented,” he said. “The new ad formats will offer them more room to get their message across.”

Not surprisingly, Detmer does not think measurement metrics such as click through, impressions and the all-important ROI will disappear with the new ad formats. They are still important ways to measure the effectiveness of campaigns, he said, even if banners are not so effective in delivering the campaign's message.

“We won't get away from counting up clicks and counting up banners,” he said. “Ultimately it gets back to which half of your media dollars are being spent.”

One thing that some observers agree on is that the new banners will force marketers to become more creative in their use of interactive and rich media technology and may foster standards for their usage as well.

One company with a vested interest in streaming media technology is Zebus Group Inc., Woodbridge, NJ. The company provides an ad-serving platform that can deliver broadcast-quality streaming video over the Internet to any browser.

Tricia Beninghof, Zebus' vice president of marketing and business development, said the new banner formats are a step in the right direction.

“As the new ad units become more prevalent, they have the potential to attract more users,” she said. “They allow advertisers to establish a more emotional attachment with the customer.”

She also said the new banner formats are the perfect vehicle for building brand recognition.

“They enable richer media formats,” Beninghof said. “It allows for very strong brand messaging.”

Analysts noted that the new ad formats might help brand marketers and direct marketers by increasing cost-per-thousand rates, even as they make click-through metrics less necessary.

“The bigger ads make `click through' less important,” Merrill Lynch Internet analyst Henry Blodget noted in a recent report on online advertising. “Key information can be brought to the user instead of making him or her leave the site to go get it. The ads also allow publishers to charge higher CPMs.”

Herold, of Interadnet, said the bigger banners can be effective if they are used creatively and efficiently.

“Bigger banner ads can be better, but only if they're supported by an integrated brand marketing approach that includes strong messaging, imagery and simple measuring tools,” she said.

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