IAB: Online Ad Industry Maturing as Advertisers Brand with Banners

More evidence is coming out in support of Web advertising as a branding medium — rather than a tool for driving immediate sales — with Monday’s release of a new report by an industry group.

The study by the Internet Advertising Bureau, conducted in conjunction with media and economic intelligence firm Meyers Report, polled advertisers and ad agency executives. The results concluded that the primary reason for advertising online has shifted away from sales generation to Web site traffic building and brand awareness.

The authors of the study, who surveyed executives who have used the Internet as an advertising medium during the past 12 months, said a strong focus on brand-building could reflect the changing role of Internet advertising as it matures — becoming more like television, radio, and print.

More than 70 percent of the respondents said they used online ads to drive site traffic, to build brands, or as part of an integrated marketing campaign. Only 46 percent of those polled said that driving e-commerce activity is their primary reason to advertise on the Internet.

Based on the findings, Myers Reports recommended that online media focus on building improved infrastructure and reducing sales goals expectations.

The IAB/Myers report did include some good news for marketers, however. Jack Myers, chief economist and chief executive of Myers Reports, said he anticipates online ad spending to increase as marketers begin to understand that Web advertising functions similarly to TV spots or print ads.

“In the face of a soft ad marketplace, we have actually increased our projections of online ad spending [from 50 percent] to 70 percent growth, based on research showing that online spending is moving more quickly into the ad mainstream than we had originally foreseen,” Myers said.

“Current economic conditions are creating negative perceptions of online advertising,” Myers said. “However, media buyers look at advertiser value, not shareholder value. Based on this research and other economic indicators, Myers Reports increased our online spending growth forecast for 2001 from 50 percent to 70 percent.”

It’s not surprising that the IAB is jumping on the bandwagon to promote Web advertising’s shift to branding. Supporters of CPM accounting — the most widely-used model of measuring banners — have been maintaining for some time that impressions drive most sales or conversions, rather than clickthroughs. Earlier this week, online media planning and serving firm Avenue A published findings from a recent trial for a client that posited just that. In November, Jupiter Media Metrix’s online ad research unit AdRelevance released a similar study.

“The industry is only beginning to leverage the medium’s tremendous marketing power,” said IAB chairman Rich LeFurgy. “This growing appreciation of what the medium does well will only increase as more companies utilize some of the newer creative formats and concepts.”

Interesting to note is that most of the large ad networks have in-banner e-commerce functionality, or are working to implement it. Several startups, too, like HotSocket and Mediaplex, offer technologies that personalize the consumer experience from ad click to purchase.

However, if advertisers increasingly are using the Web as a branding medium, and if most consumers are actually making purchases without clicking ads, then these types of initiatives might soon face some prickly questions.

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