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RESEARCH

To newcomers the internet can seem a bit like a typical problem teenager

- fast-growing, bursting with potential, largely unaccountable and very

immature. Even those who sell advertising on the system agree that there

is a problem. Paul Zwillenberg, managing director of Associated New

Media, owned by Associated Newspapers, says: ’The industry is growing

faster than the mechanisms to report and measure the service it

provides, that’s the issue.’

Zwillenberg also chairs the committee on standards, set up by the media

owners’ association, the Internet Advertising Bureau. He says: ’We need

to be able to compare apples with apples. It’s a question of finding the

best way and deciding who is going to pay for it.’

Charles Stopford, account director at Media Audits, agrees: ’The

internet is not very accountable unless there’s a direct response from

the user. That’s part of the reason why marketing departments are not

really geared up to using it.’

However, it’s not all bad news. The two major print auditing companies,

the Audit Bureau of Circulations (ABC), and Business Publications udits

(BPA), carry out checks on a growing number of websites. And even

without a standard direct response element, advertisers can gather a

surprising amount of information themselves.

Internet ads typically take the form of a small banner on a page of

text.

Calling up the page containing the ad creates an ’opportunity to view’

or ’impression’. Impressions are the standard currency of the medium.

They’re recorded on log-files and provide the first platform of

research.

After impressions come ’click-throughs’, when the user wants to find out

what’s behind the banner. The ratio of impressions to click-throughs can

provide an instant appreciation of the creative impact of the

banner.

However, getting accurate figures requires some work, as simple log-file

counts do not differentiate between one person seeing the ad ten times

and ten people seeing the ad once. Nor does it make a distinction

between human impressions and ’robot impressions’, where a page is

called up by another computer and not actually seen by anybody.

Robots are not the only worry. BPA’s UK managing director, Mike Read,

says: ’We filter out non-human traffic and other means by which the

number of impressions may be artificially boosted.’ Such means can

include impressions recorded by the media owners themselves, or even

blatant fraud. Read says: ’If your website crashes for two days you can

cut and paste a portion of the existing log-file so it looks like

nothing went wrong and advertisers are none the wiser. We’ve actually

caught people at it.’

Read estimates the cost of an audit to be around pounds 6,000 a year,

with few internet sites generating sufficient income to justify the

expense.

It’s a chicken and egg situation which he believes will gradually

resolve itself. ’As time goes by, more sites will be audited, more media

buyers will demand it and we’ll get a situation similar to print

media.’

Meanwhile, media buyers have a choice of specialised software programmes

for doing their own research, such as Clickstream, developed by the

internet consultancy, Green Cathedral.

Its marketing director, Paul Putwain, explains: ’The software enables

you to detect the internet address of whoever is creating the

impression.

It tracks the mouse cursor on the screen, giving an idea of what they’re

looking at. Even when users download pages from the net and disconnect

before reading them, we can still track what they looked at.’

There are several similar products on the market, such as NetGravity’s

Adserver system, Doubleclick’s DART technology and Real Media’s Adstream

software. It’s easy to imagine how these tools, plus the internet’s

affinity for direct response, can add up to a medium with powerful

marketing potential. With research indicating that the number of

internet users is doubling every 100 days, this is one unruly teenager

at least whose future seems rosy.

PAYMENT

Payment for internet advertising uses a CPM, or cost per thousand

impressions, system.

Advertisers buy a guaranteed number of impressions in much the same way

as cinema advertisers pay for guaranteed audiences, and rates vary from

pounds 10 to pounds 100. As in the more traditional media, sought-after

sites are more expensive.

The CPM payment method, however, has been criticised as outmoded and

over-reliant on the model established by traditional media.

There are good arguments for CPM pricing. The Wall Street Journal’s

online editorial is a subscription-based service which, according to the

advertising sales manager, David Green, delivers a qualified

audience.

CPM rates vary from dollars 45 to dollars 80 and ads are restricted to

one per page.

Green says: ’People who criticise CPM are assuming an impression is

worth zero until you click-through. But there is a branding effect,

especially in a site like ours where there’s a specific audience. Most

of them are reading text at work and don’t have time to browse through a

site.’

Alternative payment systems are likely to evolve as advertisers realise

the potential of the internet, suggests Richard Townsend, a strategist

at MediaVest. He adds: ’There are three stages to the process of

internet advertising: impressions, leading to click-throughs and finally

conversions at the site. We are moving towards developing rates for each

separate stage. If a site generates high click-through rates but low

conversions, you might start thinking about ’quality clicks’ - paying a

premium for click-throughs from identified users.’

Payment by click-throughs is preferred by some internet sites, and one

goes even further. Advertisers in Fleetsearch, an online magazine for

the fleet car industry, pay pounds 1 for every click-through, then

pounds 5 for every qualified lead. Fleetsearch’s editor, Jonathan

Craymer, says: ’The internet is so much more capable than traditional

media - why apply traditional payment models?’

Antony Carbonari, head of new-media sales at the Financial Times’s

online service, FT.com, says: ’We primarily use the CPM model,

especially for our prime banner at the top of the page. With the less

obvious positions we are prepared to discuss other methods such as

click-through rates and payment by transactions generated.’ He concedes

that the CPM model as it stands is unsatisfactory, since there is

limited evidence of the internet’s effectiveness as a branding medium.

’We do need more research but it’s clear from the feedback we’re getting

that people do take notice of banner ads. I’d defy anyone to say there’s

no branding effect.’

The development of payment systems for internet advertising is closely

tied to research, but for the foreseeable future at least, the CPM model

is widely expected to run alongside more sophisticated systems as they

are introduced.