Online Ads, E-marketing on Upswing

  |  March 2, 2004   |  Comments

The online ad industry experienced a rebound in 2003, with growth in impressions, rich media and e-mail click-through rates. However, with more ads in the market, response rates suffered.

According to an annual analysis by a DoubleClick and Nielsen//NetRatings, 2003 not only heralded a good fourth quarter for email marketing, but for the online advertising industry as a whole. The online ad serving firm measured a 49 percent increase in volume throughout the year, culminating in more than 200 billion impressions in the fourth quarter. However, with more ads in the market, response rates suffered.

Total Traffic/Impressions
(in billions)
Q1 2003 136.6
Q2 2003 149.8
Q3 2003 172.0
Q4 2003 203.8
Source: DoubleClick

Not only were there more online ads, they got larger. Leaderboard ads, sized at 728x90, registered a more than 900 percent increase throughout 2003, while button-sized ads (88x31) experienced a 58 percent decline. Other ad sizes that saw significant increases were various large rectangles and skyscrapers, with growth that ranged from 42 percent to 262.3 percent. The once-popular standard banner size – 468x60 – measured a 12.6 percent decline from Q1 to Q4, and square pop-ups (250x250) plunged 25 percent.

Rich media usage increased 42 percent over the course of 2003 – growing from 27.8 percent of ad impressions served in Q1 to 39.7 percent in Q4 – yet only 12 percent of advertisers are using the enhanced technology. Rich media captured the largest portion of the animation-using advertisers' portfolios during the third quarter of the year.

Median Rich Media Share
of Advertiser Portfolios
Q1 2003 43.4%
Q2 2003 52.8%
Q3 2003 64.7%
Q4 2003 61.0%
Source: Nielsen//NetRatings: AdRelevance

Ad click-through rates were a disappointment in the fourth quarter, however, they averaged .62 percent for the year – for every 1,000 impressions, 6 clicks result. Rich media responses declined from 2.15 percent in Q1 to 1.24 percent in Q4. The decline in click-throughs is likely a result of the increased ad volume, the report noted.

E-mail marketing crested through the end of the year, proving that despite rising spam rates, government legislation, and now, payment proposals, the mail gets through. DoubleClick's Q4 2003 email survey revealed that deliverability, open rates and click-through rates improved, and Eric Kirby, DoubleClick's vice president and general manager of strategic services, expects the industry to survive emerging obstacles.

"There are two fundamental drivers behind this: 1) Consumers understand and value permission based email relationships and differentiate these from spam and 2) leading companies are evolving their email programs faster than the environment is becoming more difficult. In other words, they are keeping ahead of the challenges in many respects."

Q4 2003 Overall E-mail Performance
Q4 2003 Q4 2002 Change
Delivery rate 87.3% 86.5% 1%
Open rate 36.8% 36.4% 1%
Click-through rate 8.4% 8.0% 5%
Source: DoubleClick

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