June 13, 2001 1:00 PM PDT

Online ads get in your face

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Like many recent visitors to The New York Times' Web site, Mike Brittain was surprised to find an extra browser window loitering on his PC after he took his daily dose of news.

The window, which held an ad promoting X-10's "Tiny Wireless Video Camera," is known as a "pop under" ad, or a page that lurks behind the requested one and appears when the original window is closed.

"It was surprising but confusing--a distraction more than anything else," said Brittain, a student in digital media studies at the University of Denver.

Readers such as Brittain aren't the only ones struggling to understand such techniques. Net publishers are testing various ways of accommodating advertisers so they can draw in scarce online marketing dollars. So desperate are they to make money that otherwise conservative Web sites are using bigger, more-obtrusive ads to catch buyers' eyes--and the early results show that such ads are effective.

For example, Media Metrix reported Wednesday that X-10's ad campaign helped the company become the No. 5 Web property in May, ahead of sites such as Excite and Amazon.com. (Media Metrix credited the ads with driving 95 percent of the site's traffic.)

But the flip side is that publishers risk alienating readers and seeing their own traffic numbers fall--a fear that for years convinced many Web sites to avoid splashy pitches. For now, the pendulum has swung far in the advertisers' direction.

Various sites deliver pop-up windows that omit the delete button or place it off the screen, for example, making the window difficult for visitors to close. Some sites set a timer on pop-ups so they appear every 15 minutes. One site, Passthison.com, launches three browser windows with various promotions once a visitor tries to exit.

"The name of the game is becoming profitable," said Michael Tchong, editor of Iconocast, an online advertising newsletter and site. "Everybody's scrambling for dollars, and everybody knows that marketers are reluctant to advertise on the Web because they've heard it doesn't work."

The new online marketing
What do advertisers want? Bigger, flashier and harder-to-ignore formats that in some cases go farther even than television in intruding on their audience.

Eager to please, publishers are engaging in a wave of experimentation that has spawned larger interactive banners and pop-ups on sites such as the NYTimes.com, Fortune, MSNBC, CNN and Yahoo. Others use streaming video and audio banners, and the most extreme offer a host of free-form technologies that let marketers command an entire Web page.

In one recent example, Ask Jeeves this week transformed its home page to a tropical theme for two days to promote 20th Century Fox's video release of the Tom Hanks hit "Cast Away." Among other things, an animated volleyball--a prop in the movie--bounced across the company's home page as an added attention-grabber.

"Advertisers are getting more for their dollar than they were a year ago simply because the dollars aren't there," said Denise Garcia, advertising analyst at Gartner.

A bigger dilemma
Beyond drawing in short-term revenues, some Web publishers are hoping new formats will change the way online advertising is measured and valued by advertisers.

Although traditional ad prices are based on measurements such as demographics and number of subscribers, Web sites are typically paid by the number of times readers "click" on an ad. Clicks are supposed to offer advertisers a solid measure of response, but the standard has progressively offered small returns to publishers. Average click-through rates on the Net have fallen to an estimated 0.44 percent recently, according to Nielsen/NetRatings, down from a high of 2.12 percent in 1996.


Meta Group says Web advertising will increasingly be rationalized as a component of multimedia, brand-centric marketing campaigns.

see commentary

Online ad spending has flattened, too. Recent figures from the Interactive Advertising Bureau reflect slowing percentage growth in the online ad market after years of unprecedented development. Year over year, revenues have typically jumped by triple digits; for example, from 1998 to 1999, annual sales ballooned by 141 percent. Revenues now are steadying around $2 billion a quarter, or $8 billion annually. For 2000, U.S. online ad sales grew by just 78 percent from 1999 to $8.2 billion.

Some of the new formats are generating much bigger click-through numbers. Pop-up ads, for example, which launch windows on top of Web pages, on average generate 5 percent to 6 percent click-through rates, said John Bohan, chief executive of online ad network L90. Pop-unders of the sort used by the NYTimes.com generate 2 percent to 3 percent click-throughs, he added.

Just as with banners, however, analysts predicted those numbers will drop as the novelty factor wears off.

"Any publisher that promotes these ads based on click-through rates is digging a grave they can't get out of," said Marissa Gluck, online advertising analyst at Jupiter Media Metrix. "It's the same problem with banners that we've seen for the last five years: With greater ubiquity, there's always a decrease of response. And click rate isn't the best metric of success."

Many publishers and marketers are eager to break away from clicks by proving the Web is an effective platform for name recognition and branding, or in other words, the kind of marketing campaigns that feed television.

For example, New York-based United Virtualities created a technology called Shoshkeles that allows free-flowing images to traipse across a Web page, independent of a banner or any standard format without requiring a plug-in. Boston.com ran a Shoshkeles promoting subscriptions for the Boston Globe, in which a newspaper truck "drove" across its Web page tossing papers. Terra Lycos and Monster.com also experimented with the format. And Variety.com launched a campaign Monday promoting the upcoming movie "Artificial Intelligence" with the song and image from its trailers floating over the home page.

"These ads are kind of free form," Iconocast's Tchong said. "You're going to see a heck of lot more ads that float over the screen as par for the course--it's just something that we'll have to get used to."

Demand for Shoshkeles, which only run for 8 seconds, is rising "because they work," said Debra Brown, CEO of United Virtualities. "They clearly engage and involve the user; people are even trying to refresh and reload the page in order to see them again."

The ads, which can cost between $25 and $75 per thousand impressions, are judged based more on their branding effect than a click through, Brown said. (Traditional banners can run as low as $1 per thousand impressions, which are the number of times an ad appears on a page).

Los Angeles-based VideoBanner and Atlanta-based Eye Wonder have introduced ad units that can feature full-length movie clips or other video without a plug-in. Philadelphia-based Pointroll created an expanding banner that covers the Web page when consumers roll their cursor over information contained in the ad.

In addition, Yahoo recently ran a one-day campaign for Ford Motor that virtually hijacked the portal's home page when viewers clicked on the animated ad. To create the effect of a virtual earthquake, the campaign used dynamic HTML technology, which combines style sheets, scripts and HTML formatting commands to make Web pages more interactive.

Other marketers are going so far as to design digital games in homage to their products. Advergaming is attracting the likes of Nike, Ford, Nickelodeon and Paramount Pictures. 20th Century Fox even created a digital scavenger hunt to promote its upcoming film "Planet of the Apes."

see special report: Ad Nauseum Pop-up advertisements are everywhere, too. Similar to many other unconventional methods, pop-ups are designed so that consumers can't avoid them. Hotmail, MSN, Weather.com, NYTimes.com are just a few of the sites running the format continuously. A pop-up known as the Superstitial, or a commercial quality ad with audio and video, has attracted more than 200 traditional advertisers, including Taco Bell and McDonalds.

Many people fend off these and other promotions with ad-blocking software such as AdSubtract and Webwasher. Consumers can also disable JavaScript--a programming language that used to create interactive documents--in their browser settings to prevent pop-ups or pop-unders from bombarding them, but doing so can break many navigational aids for surfing the Web.

Brewing backlash?
In the past, reviled marketing techniques have survived storms of consumer protest. Junk email, for example, continues to clog in-boxes across the globe despite repeated attempts to stamp it out.

Nevertheless, sites that don't take into account consumer attitudes could suffer over the long haul.

NYTimes.com reader Brittain, for example, says annoying pop-up ads on Netscape's site already keep him from going there for news and information.

"Most of the time if it's something that annoys me, I'll stop going there. But I value (Netscape's) content in a different way than I value The New York Times site."

At least one company is trying to deal with negative responses from consumers. X-10, the company behind a blanket of pop-under ads on the NYTimes.com and across the Net, gives irked consumers instructions how to "opt out" of receiving the ads for 30 days.

For its part, The New York Times said that it has received mixed reactions to the X-10 ads. Like many Net publishers, NYTimes.com was approached by the marketer to test the format.

"We're always looking at new and creative ad formats," said New York Times spokeswoman Christine Mohan, adding that the NYTimes.com charges a "premium" for the ads.

To calm the surprise effect of its ads, the pop-unders are set to appear only once a day per viewer.

Nevertheless, negative reactions to the ads--and X-10--seem to be numerous.

"These new ads really seem to bug people," said Richard Smith, chief technology officer for the Privacy Foundation who is often a sounding board for friends and colleagues about technology. "It's going to be interesting to see if sites keep them or not."

 

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