More NewsStudy: Agencies Still Skeptical of Interactive Advertising

Study: Agencies Still Skeptical of Interactive Advertising

Gartner finds ad agencies unconvinced by the online ad industry's efforts to promote the Web as effective for branding.

Media-buying executives aren’t warming to the idea of using the Internet for improving brand awareness, according to a new survey.

GartnerG2 polled 52 executives at ad agencies for their attitudes toward interactive advertising, which it defines as encompassing the Internet, wireless and kiosks. GartnerG2 found that, despite the high-profile efforts of the industry, the Internet is still viewed as a direct response medium, not a branding opportunity.

The survey found that 80 percent of executive see the Internet primarily as a way to either drive sales or drive traffic. Only 20 percent said its primary strength was to increase awareness and positioning. Traditional media were rated as four times better at achieving those objectives.

“Clearly, the primary growth challenge for interactive advertising is to strengthen its perception as a brand awareness and product positioning vehicle,” the report noted. “Until interactive can demonstrate an ability to deliver on brand awareness and product positioning campaigns, dollars will not begin to shift from traditional to interactive, and growth will be incremental.”

GartnerG2 cautioned that the findings were meant to be “directional.”

The booming paid search market has added to the continued perception that the Internet’s core strength is direct response. According to Jupiter Research, which is owned by the parent company of this site, the Internet ad market will grow this year only on account of search, with spending on display ads declining.

The Interactive Advertising Bureau, which assisted GartnerG2 with the study, has pushed the Internet’s branding power with its series of cross-media studies and an online ad campaign.

However, GartnerG2 found that the ad executives had a rather sour view of interactive. Over half of respondents said their opinion had either not changed or grown more negative in the past year.

The biggest hindrances to a greater role in the media mix: too little standardization and measurement tools, and skepticism by upper management and clients.

That skepticism has led a sizeable number of firms to refrain from recommending Internet advertising. According to the survey, over 32 percent of executives said they did not recommend online campaigns. In comparison, none of the four traditional media — television, radio, magazines and newspapers — had more than 10 percent recommending against its use.

GartnerG2 analyst Denise Garcia said the more agencies engage in interactive campaigns, the more positive their perceptions and the more dollars are spent. Similarly, she said further experience in the medium would lead to a better perception of the Internet’s role in branding.

Indeed, 70 percent of the executives polled said that they would increase their spending on interactive advertising by the end of next year. By the end of 2004, the executives estimated nearly 10 percent of their clients’ media dollars would be spent online. GartnerG2 forecasts Internet advertising spending will reach $9.5 billion in 2007.

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