Web Advertisers Are Flocking Increasingly To Cheaper Search And They Question The Effectiveness of More Expensive Banner and Column Ads, Wanting Proof Their Campaign Will Succeed Before Committing Long-Term

Philip Stone May 20, 2008

One of the things that has always bothered advertisers is that the medium that takes their money usually offers no guarantee of success. Each platform says it is the best for the message, but if it doesn’t work then tough luck on the advertiser. No money back guarantees if sales targets aren’t met.

Which brings to mind what Viscount Leverhulme said, he one of the founding Lever Brothers that started business in England selling bars of soap made with vegetable oils instead of tallow (fat from cattle and sheep) and who towards the end of his life in 1925 knew a thing or two about effective newspaper advertising, “Half the money I spend on advertising is wasted and the trouble is I don’t know which half.” What was true back in the 1920s is still true today although every advertising platform out there will bombard you with facts and figures apparently proving their medium is best.

Along came the Internet and advertisers thought that finally they could actually track how effective their spend was. They could tell how many times people were drawn to their ad (click) and what happened afterwards. But recent market evidence is showing that as economic times grow harder Web advertisers are looking more and more for proof that a Web display ad campaign will really work before they are willing to make a long-term commitment.

“The new advertisers are more cautious about requiring some sort of proof or evidence that something is working,” Paul Iaffaldano, executive vice president and general manager of the Weather Channel Media Solutions, told The New York Times.

A statement from WebMD Health made the same point – that advertisers are shifting to short-term buying commitments which the company believes is because of the difficult economic climate but it could also mean advertisers want to be able to accurately measure how their campaign is doing before committing long-term.

None of that is what traditional media needs to hear these days. Everyone accepts that newspapers have to be multi-platform and that means all of their digital projects have to make up the money that print is losing, so far a losing battle. If Web display advertising is slowing down, then that’s not going to help the cause any.

As the Times noted, even its digital sites that are among the most advanced in the country are seeing slowing growth -- in its most recent quarter Internet revenues increased just 16% compared to 20% the same quarter a year earlier.

Television can still get away with selling advertising based on large numbers such as the Super Bowl, but for newspapers those days are gone.

Earl Wilkinson, executive director of the International Newsmedia Marketing Association (INMA) said in his annual forecast, “Identifying a niche audience with high commercial value – and matching that audience with a product with as few marginal readers as possible -- will become the driving principle in product development.

 “That is a fundamental shift for the past 3 ½ centuries of newspaper publishing when the product came first, an anonymous audience gathered around the product, and advertising was sold based on how big the audience was.” Another “fundamental shift” as a sign of the times is that INMA, a newspaper trade group, has removed  the word “newspaper “ from its name replacing it with “newsmedia”,  but it seems to much prefer being known now just by its initials.

Newspapers and their trade groups well recognize the Internet is where the growing readership eyes are, but how to capitalize on that is not so easy. The new editor of the Kansas City Star told his own newspaper, “On the Internet I can sum up our strategy in two words: Grow faster. That’s where a lot of people are finding us.” But who exactly are those people and what if Web advertising slows down, then what?

Independent magazine publishers got the message square between the eyes at the Magazine Publishers of America Independent Publishers Conference (IMAG) last week.  The conference theme was the jump from print to multi-platform with a warning from Cia Romano, founder of the Guru Web consultancy, that those who don’t make the transition successfully are “not going to survive what’s coming.”

Many print publishers still apparently haven’t got a handle on whom their Web readers are, and that’s information Web display advertisers really want to know.  According to Folio, Romano asked the magazine publishers if they knew the three main categories in which they could place their Web readers and only two hands were raised. “That’s not good,” she scolded the delegates, “If you are not user centric then you have no strategy.”

But the most telling quote came from Bryan Welch, publisher and editorial director at Ogden Publications – among its magazines are Mother Earth News and Natural Home -- and he is IMAG chairman. “We have about a million paid subscribers to all our print publications and about 400,000 registered users online. We believe this is backwards. We should have 10 million registered users. Once we have them in the community, I don’t know what we are going to sell them, but I know damn well we’re going to sell them a bunch of stuff.”

The key to Web success – and therefore the key in attracting that Web display advertising – is for Web sites to have identifiable target audiences.  More than 40% of Web time is spent on content sites according to the Online Publishers Association, so media sites have that advertiser draw going for them, but increasingly Web advertisers want the numbers to back up readership claims – not just the total number of readers but who they are, what do they do  etc.

When FTM itself last week seriously went looking for sponsorship deals the first question asked was, “Who are your readers.” It wasn’t how many readers do you have but rather, who are they?

Charles Saatchi of the famous UK Saatchi Brothers who made their fortunes from the advertising business said some time ago, “Most advertising is ineffective. Research shows that 75% of press ads are not even read. And most of these are the work of big sophisticated agencies…Agencies and clients have become too sophisticated, whereas advertising is not a sophisticated business at all. It’s a simple business.” If anyone should know the truth about advertising effectiveness, he should.

Now, go tell that message these days to some newspaper publishers!