One of the biggest puzzles in the e-commerce sector is the
disparity between analysts' predictions of online advertising
growth and businesses' scepticism about the effectiveness of the
medium.
But this problem could be overcome if new approaches start to
spread, writes
Danny Bradbury.
Although Forrester Research recently predicted that online
advertising would grow by 70% across Europe this year, both Real
Networks and NetZero have blamed disappointing financial results on
a lack of online advertising revenue.
One of the biggest problems for online advertising has been the
lack of specialisation, explained David Salem, creator of online
advertising firm Sonic Advertising. Sonic works by adopting a
traditional print media approach to advertising. This means trying
to understand a client's agenda and "manually" finding the most
relevant sites to place them on.
According to Salem, this approach is more effective than the
technology-oriented methods of companies such as Doubleclick, which
use automated site activity analysis to help advertisers plan
campaigns.
"Our concern in the marketplace is that there is very little
attention being paid to the importance of targeting," said Salem.
"If a surfer sees an irrelevant ad and doesn't click on it, the
campaign is considered to have failed."
But this is just half of the problem. Another huge obstacle to
online advertising could be the interactivity of the Web. Some
companies expect high numbers of end-user click-throughs, whereas
they should arguably be thinking about banners as bus hoardings
that simply create brand awareness.
Nevertheless, banners bring their own problems. The use of
banner-blocking software, which stops advertising banners being
displayed on Web sites, could stymie the market if it becomes
widespread.
One alternative is for companies to target their audience even
more precisely by seeding the market. New York-based Electric
Artists approaches individuals that it has identified as key
communicators for a particular product category and asks them to
evaluate the new product. The individuals then communicate their
message to others.
"We go after fan sites and mailing lists," explained Electric
Artists' CEO Marc Schiller. "Yahoo has some terrific technology for
people to create consumer-based clubs. Napster is a community.
There are a lot of places where the consumers have created very
powerful links."
Sometimes, it seems that even the most advanced technology media
needs that human touch.