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Beyond banners: how IBM's new idea increases click-throughs
"No content-driven site is going up without some advertising rotation built into its model".
Mainstream media's reputation for reliability and credibility have made its affiliated sites among the most popular on the Internet. Unfortunately, that popularity has not translated into a corresponding revenue flow.
With few exceptions, the standard newspaper subscription model has not held up on the Internet. Ditto for advertising, once thought of as the true way to profitability.
But banner advertising, despite being badly battered by ridiculously low response rates, poor sales fulfillment and technology that strips it out, may hold one solution.
IBM has been testing banner ads containing what it calls "rich media," a combination of animation, sound, video and other effects to attract the reader. In testing, these ads have drawn click-through rates of five percent to eight percent, a far cry from the 0.5 percent to two percent click-through rates of traditional banner advertising.
John Sanford, vice president of design at the Internet design powerhouse Interactive Bureau of New York and one of the design brains behind MSNBC's web site, thought IBM might be on to something. "If that's supportable and turns out to be true in the real world, they'll be wildly successful," Sanford says.
And that success can translate into advertising revenue, a key piece of everyone's Internet strategy. As Sanford says, "No content-driven site is going up without some advertising rotation built into its model."
One problem with advertising is that when people are at newspaper sites, they are not there for advertising but to look up information. Traditional banner ads, when clicked, take readers somewhere else, somewhere they don't really intend to be.
"If people are looking for scores for baseball games and see ads for tools for the barbecue, people aren't going to say, 'I need tools for the barbecue.' People aren't that dumb," says Eric Meyer, an assistant professor at the University of Illinois journalism school.
The Hot Media product managers at IBM agree.
"Banners aren't interesting," says Bill Pence, director of development for IBM's Internet Media group, "And if you click on them they take you somewhere you don't want to be."
Pence says Hot Media uses Java applets and what he calls "smart content" to change that. With the Hot Media toolset, advertisers can change their ads to include animation or other rich content. The size increases by 15-kilobytes to 20-kilobytes, including the Java applet needed to display the additional content, adding a couple of seconds to the time needed to display a page.
If a viewer clicks on the ad, additional content and as-needed Java applets are downloaded into the same window. All of the additional content and applets remain in the 15-kilobyte to 20-kilobyte range, making the download fairly swift.
"As you click through, you get more content, more video or audio," Pence says. "This makes it the same to click or not. I can peruse the banner without losing my place."
The smart content also kicks in to tailor the ads to the audience. After all, fancy content doesn't do any good if the right audience doesn't see it.
MatchLogic, one of the major providers of ad delivery services on the Web, combines the Hot Media technology with some other tools to correctly target viewers, taking into account things ranging from web browsing habits to connection speeds.
"We can deliver ads by the type of story or content," says Mike Healy, MatchLogic's vice president of business development, "but we can also deliver based on technographic, psychographic and geographic data."
And that, says Healy, has an impact on the bottom line: "You can charge higher revenue because you can target the audience they [advertisers] want."
IBM's Pence says advertisers now can create multiple ads for one banner space and deliver the right one to the viewer.
IBM and its partners say they can provide these services without infringing on the privacy of those browsing the Web.
"If I want to target a million people who have 14.4 modems," says MatchLogic's Healy, "I can do it. I don't know exactly who they are, but from a targeting perspective, I really don't have to care. I can make assumptions and impute data based on what I do know."
This is not a panacea for newspapers and their web sites. There are still quite a few people out there using older browsers that do not support Java. Quite a few others have the Java features disabled, and the technology itself is notoriously quirky, needing tweaking for every browser and operating system an applet might run across. But it's a move in the right direction.
The trick now is to see if it works in the real world.
-- Steven E. Brier
From NEWSINC., June 7, 1999, Copyright © 1999, All Rights Reserved.
