B2B Online Advertising: Dead or Alive?

A rash of statistics in recent months tells a mixed story about online advertising… and there is much to consider for business-to-business (B2B) marketers.

Banners account for less than half of all online advertising, but more than half of all B2B online ads are direct response. The Interactive Advertising Bureau (IAB) reported in April 2001 that online advertising in 2000 reached $8.2 billion, up from $4.6 billion the prior year. Although this was a 78 percent increase, the IAB said that it was lower than in past years. Banner advertising made up 47 percent of the year’s ad revenue, with sponsorships accounting for 28 percent. AdRelevance says that about 54 percent of B2B online ads are direct response ads, mostly to drive traffic to Web sites.

What to consider: Look for advertising opportunities beyond the banner. New ad sizes are beginning to prove their effectiveness (see below). Consider whether online advertising is the best way to spend your money. Would you be better off using e-newsletters, email, or even traditional direct mail instead? Do some testing of one against the other to find out.

Banner click-throughs are still falling, and the ad market is soft. IT companies, most of them being B2B marketers, are more successful than others in using online advertising, according to a May 2001 study by Nielsen//NetRatings. Nevertheless, the study suggests that banner ads are run too frequently on sites with limited audiences, concluding that this causes click-through rates to plummet.

Nielsen//NetRatings also says that online advertising frequency rates are in the high teens versus three to four percent in offline advertising. The statistics in the 2001 eAdvertising Report, published by eMarketer, are even more sobering. The report says that more than 99.7 percent of banner ads do not get clicked and 74 percent of online advertising space is not sold.

What to consider: Look for media deals. Make sure online advertising works harder by building in a direct-response component. Consider email newsletter ads and search engine ads as potential online advertising alternatives.

New ad sizes are more effective. Despite the higher cost of new, larger online ads, such as skyscrapers, these advertising vehicles seem to be resulting in higher click-throughs. A July 2001 study by CNet suggests that the new ad units enhance aided and unaided brand recall by as much as 55 percent and positively impact consideration of brand purchase after one exposure.

In July 2001, the IAB cited three studies that attest to the success of new, larger online ads. One survey of 8,750 Web users shows that larger ads are 25 percent more effective than banner ads at raising brand awareness and message association. Most effective are skyscraper ads. Another study, commissioned by DoubleClick, reports an 86 percent boost in brand awareness from larger ads versus 56 percent with banner ads.

What to consider: Move to bigger ad units, or at least test them against banners. Consider the impact of ad size on awareness. Look for opportunities to pinpoint your media buy, taking ad space on well-targeted sites that address audiences important to your marketing efforts.

Click-throughs are a misleading indicator of banner effectiveness. A June 2001 study of banner branding in Europe, the first of its kind, was conducted by XXIST.Com (now defunct), Engage, and just-sites.com, a business knowledge provider with multiple sites. Banner ads were created displaying the site logo, the URL of the target site, and a strong branding statement, but no call to action. Sites that ran the banners did not have any hyperlinks to the destination sites. No additional offline or online advertising or promotion was executed during the campaign or in the month preceding the campaign.

The results of this study indicated that nearly half of the responses to the campaign came from people who saw the banner but did not click on it. And 60 percent of these indirect responders arrived at the destination site within 24 hours of seeing the ad. Indirect responders were more likely to return to the destination site than those who clicked on the banner. As the study’s conclusion pointed out, had the campaign been analyzed purely on click-through rate, or even post-click conversion rate, the campaign would have “failed.” By aggregating and tracking the direct and indirect response data, this campaign achieved half the cost per acquisition compared with that of direct response only.

What to consider: It pays to research what’s really going on with your advertising so that you’re investing precious promotional dollars wisely.