The Sky Is NOT Falling!

With all due respect to my esteemed fellow ClickZ contributor Michael Fischler, I just can’t let his column of last week, “Web Advertising Doesn’t Work,” escape without comment.

There is no question that average click rates are down, and more people report “never” looking at banners. It’s true that these are uncomfortable indicators for direct response proponents. But leaping from there to a broad claim about web advertising on the skids is akin to Chicken Little’s deduction that the sky was falling.

Advertising on the web does not start and stop with banners, and advertising effectiveness — in any medium — is not wholly evaluated by response levels. That this kind of thinking pervades the internet advertising community is a testimony to the industry’s youth, inexperience and tunnel-vision. In my view, it cannot be interpreted as indicative of anything larger.

There are at least two insupportable aspects of Fischler’s argument. Today, we’ll focus on the most egregious error. Simply put, the error is that the effectiveness of advertising cannot be measured solely by the response rate.

Direct marketing or direct response is certainly a valid form of marketing, one that plays an important role in certain, specific instances. But in the land beyond the internet, no self-respecting marketer or advertiser would be caught dead ascribing direct marketing objectives to every other component of the marketing mix. Not all (or even most) advertising is evaluated for effectiveness based on measured response.

Let’s look at TV, for example. Television advertising represents a $50 billion annual business in the United States. No one clicks on a TV commercial. There is no direct way to measure if the viewer of that commercial ever takes a specific action based on having seen the ad. (Or, frankly, no way to know whether the intended viewer was even in the room but that’s another issue altogether).

A tiny percent of television spots have a response mechanism (like an 800 number); most are pure awareness plays.

Outdoor advertising buys are made based on estimates of how many cars will pass by and on the general demographics of the people in those cars. There is no response mechanism, no reliable audience measures, and little detail about the passerby’s demographics or interest or attentiveness. Event advertising — like the signage at stadiums and sporting events — represent another vibrant but non-response-oriented medium.

Consumer magazines offer a direct response option for advertisers, but exercising that option is not the norm. Most consumer magazine ads offer no means of contacting the advertiser, and no intent to generate any direct response. Even where an advertiser could incorporate DM principles, most choose not to.

Are we saying, then, that none of this is good advertising? That none of these media work? If you draw that conclusion, you are far outside of the advertising mainstream.

Advertising professionals judge effectiveness based on a complex analysis of brand awareness, store traffic, market share, mind share, price-per-unit sold, customer loyalty, and a host of other, often proprietary, product-specific measures.

Let’s not hold internet advertising to a different standard than all other advertising, just because some direct marketing capabilities exist.

Direct response advertising is one reasonable goal for an ad campaign, and I have no argument with any advertiser setting direct marketing objectives for a planned campaign, and buying accordingly. Direct marketers have always understood that their needs and media buying criteria are different than those of other advertisers.

So, looking at the facts as presented, it seems fair to say that banners have not, across the board, turned out to be the direct marketing panacea that some had hoped for. But does that make all of web advertising a failure? In my view, we have barely begun to explore the range of capabilities of this newest medium. To paraphrase the immortal words of Mark Twain, “The report of web advertising’s death has been greatly exaggerated.”