Going Up? Vertical Ads Gaining Popularity with Sites, Advertisers

The number of unique vertical online ads increased by nearly 70 percent during the fourth quarter of 2000, according to data compiled by the AdRelevance unit of Jupiter Media Metrix.

AdRelevance also found that vertical online ads cost advertisers $54 for 1,000 impressions (CPM) — almost twice as much as full-size horizontal banner ads ($28 for 1,000 impressions), whose average standard rate card value dipped nearly $3 from the third quarter. Jupiter analysts say that publishers are embracing the new ads in an attempt to stimulate advertiser interest and increase revenues even though the ultimate value of the new format is not yet known.

“Publishers are clearly experimenting with new and larger ad sizes in an attempt to increase online advertising revenues in what is undeniably a soft market,” said Christopher Todd, a Jupiter analyst. “However, bigger ads don’t necessarily mean better results for advertisers — especially over the long term. A great deal of work still lies ahead to unilaterally identify and communicate the true value proposition of online advertising as a medium.”

The number of different vertical banner ads increased from 2,809 to 4,725 during the fourth quarter of 2000. Vertical banners received 20 percent of all ad impressions during the quarter — a total of 1.9 billion impressions — while the full horizontal banner continued to be the most common online ad format with 36 percent of impressions. Vertical banners typically appear on highly trafficked pages of a site as advertising sellers attempt to make their sites more attractive to advertisers.

The Internet Advertising Bureau (IAB), which approved the addition of vertical ads to its recognized standards in February, has also released a survey on the format. The study, done in association with the American Association of Advertising Agencies (AAAA), found that advertising industry decision makers are overwhelmingly supportive of the new voluntary guidelines issued by the IAB for interactive marketing units.

More than 90 percent (93 percent) of those surveyed view the new units as more effective than previous guidelines, and 26 percent have already utilized the new larger units. The respondents also said they view the Internet as a multiplatform strategic marketing vehicle with a diversity of strengths. On a scale of 1 to 5, with 5 being the most promising, respondents ranked the Internet’s potential for both one-to-one marketing a 4.3 and direct marketing a 4.2. The Internet is also considered a strong promotional vehicle (3.7) and a good branding tool (2.9).

Other findings from the IAB/AAAA survey include:

  • 43 percent of the respondents believe the new units warrant higher CPMs and attach an average premium of 13 percent to the units.
  • On a scale of 1 to 5, with 5 being the most problematic, respondents indicate the greatest difficulties in adopting online advertising are banner size (4.2) and lack of measurement (4). Other major obstacles rated as significant include low click-through rates (3.9) and lack of good creative (3.4).

The survey was conducted at the AAAA 2001 Media Conference & Trade Show in New Orleans.

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