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Much ado about online-advertising

By Debashish Chakrabarty

Y2K is over and so is the fantastic fairy tale for the new millennium brought to a wondering world via the magic of Internet. After all, many small dotcoms have dinosaured into dotgones and many have announced bankruptcy. The worldwide slump in Technology stocks has seen high-flyers like Priceline, Yahoo, Boxman and Boo suffer reverses and even mighty Microsoft has seen its market capitalization fall in 2000. So while last year was all Christmas time that brought sacks full of cash, venture capitalists and print headlines by the dozen, year 2001 has newspapers screaming right from the onset 'Dotcoms in flux'.

Kabhi cushy kabhi grim

Consider this: Dotcoms need revenues and if you site is not involved in direct sales probably advertising is a major way of making moolah for you. Sites differ in popularity and only a minuscule percentage of websites are able to generate decent money from advertising. On the contrary, few doubt that Web-advertising overall will persist to grow. From a paltry $175 million in 1996 it rose to $3.6 billion last year. By 2005, estimates say it will be $32.3 billion-almost as big as radio and magazines put together and just short of cable TV/Direct mail.

But at the moment it’s less of cushy and more of grim. A recent article in The Times of India declared - ‘Asia not immune to online advertising gloom’ - drawing resemblance to the doldrums US portal powerhouse Yahoo! Inc is in. Murky ad-revenue figures combined by anemic e-commerce activity are paving way for awful forecasts. Japan, by far region's largest online-ad market, expects to cut spending on ads by about $700 million (from $2.7 Billion to a mere $2 Billion).

So Why is dotcom advertising drying up? People opine that negative news have much maligned the scenario and scared away advertisers. Others say on-line advertising was horribly oversold and over hyped; while the startups increasingly became choosy about where they would put their dwindling dollars, the offline majors aren't able to gather guts putting their faith on this advertising medium.

Internet v/s the Idiot Box

Internet is largely akin to the model of television, where commercials are supposed to pay for all those free shows. Sadly, the parallel ends here. Web is poles apart from the buddhu baksaa1. Web is a cognitive medium, TV is predominantly an emotional one. The traditional resplendent advertisements won't work on Web. Web  is user-driven, he makes and breaks the navigation plans, which links to click and which pages to stay on. The user dominates the medium here. Speed is the essence on Web and in countries like China, or ours where a pop-up window may take 3 minutes to download it’s futile to talk about emotional advertising.

So what do the Doctors prescribe?

• Corporate Sites should concentrate on services aspect avoiding the sales-pitch
• Rely more on Search Engines and Hyperlinks than the Banner advertisements, don't forget to pitch that URL in you Press releases and print advertisements
• Studies also revealed that incidental memory for ad content is significantly lower in online medium compared to print medium. An important practical implication of this study is that, in order for web advertising to work, advertisers have to do more to attract readers than they would in the print medium. For example, animated ads as opposed to still ads might be needed to attract online users. Personally, I find many such banners creative which redirect you by stealthily posing as innocent ‘Dialog boxes’ with OK buttons and all that and even some with ‘Scratch cards’.

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Hits or Misses?

Why the Internet is not proving as much a terrific marketing tool as hyped about. Perhaps this is why. Companies advertising on the World Wide Web currently have no accurate way of measuring who, or even how many people, see their ads, a University of Southern California (USC) study shows. Researchers at USC's Marshall School of Business have found that today's methods for determining the number of "hits" an Internet ad receives can be wildly inaccurate.

The researchers studied thousands of hits on five major websites (news, education and entertainment sites and two information databases) and tabulated those hits on the basis of Internet protocol addresses alone. They then tabulated the hits more accurately by imposing mandatory log-ins and other identification methods on the same visitors to the sites -- measures that most websites are reluctant to use for fear of alienating their visitors. The resulting disparities were striking.

Using Internet protocol addresses alone as a means of identifying website hits led to a 39% underestimation of visits, a 64% overestimation of the number of pages seen by each visitor and a 79% overestimation of the time spent on each visit.

One problem is that users often lack unique on-line identities. One person can have multiple web addresses. On the other hand, Internet providers, such as America Online, give a single address for multiple users. So when marketers try to measure user requests, or "hits," for a particular web page, they can't tell whether one person requests the page five times or five people request it once.

In addition, caching prevents market researchers from measuring how often a web page is seen during a user session. Once a surfer clicks on a page, his computer temporarily stores the page for the duration of the session, in case he wants to see it again. This caching feature prevents researchers from knowing how many times a user is exposed to the ad.

Experts say greater accuracy can be achieved thus:

• Repeat visitors to a website ad can be uniquely identified by "cookies" -- identifying pieces of information sent to, and stored on, each visitor's computer.

• Visitors can be identified through password systems.

• Partial or complete elimination of caching would enable advertisers to follow a visitor's path on a website and track the number of exposures to an ad.

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1. Hindi for 'Idiot Box'

Author's Note: This piece originally appeared in the March-2001 Issue(No.5) of the 'Byte Bullet-in', a bi-monthly newsletter published by Ruchi Infotech Ltd, Indore.

©2001 Debashish Chakrabarty. The article can not be copied, distributed, excerpted, reviewed without the written permission of the author.

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