Harnessing the Internet: An Online Advertising Primer.

The Internet is one of the only mediums that can combine the targeting of direct marketing with the reach of television. Advancements in Internet technologies are making online advertising easy and effective for both local and national advertisers; nationally-recognized Forrester Research estimates that Worldwide Internet advertising expenditures will grow from approximately $3.3 billion in 1998 to more than $24.1 billion by 2003. While opportunities abound, there are also challenges faced by both advertisers and Web publishers that require careful consideration of how to best meet online objectives. Few companies have in-house resources available to implement advertising and direct marketing programs across a wide array of Web sites in sufficient enough to have an impact. Likewise, few Web sites have the clout to attract enough premium advertisers to sustain their business.

Leveraging new advertising and marketing tools can be daunting without the appropriate guidance, but when the right marketing mix, advertising principles and strategies and creative implementation are in place - impactful results are delivered. Research by companies such as Jupiter Communications indicates that effectiveness of traditional banner advertising is decreasing, accounting for only 37 percent of 2000 ad budgets, while the role of more sophisticated advertising solutions with elements such as streaming audio and video, microsites, jump pages, wireless platforms and campaigns that integrate online an off line components have greater impact and currently account for 52 percent of budgets. As new technologies evolve, finding the most effective combination of strategies and applications given your stated objectives will be key.

The Primer

The following is a primer outlining essential points and considerations that advertisers should consider before dedicated budget resources to online advertising:

Define your objectives

The infinite breadth of the Internet makes cost-effectively harnessing its power a challenge. While the number of Web sites with loyal and committed viewers provides an ideal opportunity to customize and target information knowing which sites to invest in is a time consuming process that requires a great deal of trial and error As in traditional advertising, before deciding who you want to target and how to implement a campaign, its critically important that you know and understand the consumers you want to reach, define your message and have a clear picture of your objectives. Are you trying to increase traffic on the site? Drive sales? Build brand awareness? Regardless of your strategic objective, there should be a compatible, measurable and defined method of tracking how well you are meeting those objectives.

For example, ShoppingtheWorld.com, a premier e-commerce site, was looking for an online advertising solution that would: 1) Drive traffic to the site; 2) Generate brand awareness; and 3) Build a qualified user base. To meet these objectives, L90, Inc., an online direct marketing solutions firm, created a viral marketing sponsorship - the company placed targeted banner ads through L90's network of Web publisher sites offering the chance to win a $500 shopping spree to all registered users and a $25 gift certificate to the user for referring friends.

Of the 733 users who saw the banner ad and registered with L90Link, a viral marketing technology that leverages the power of e-mail communication, close to ten percent registered. As a result, 7094 new users were referred to the site and 7.65 percent of the referred users registered with ShoppingtheWorld.com,

Second: Know your consumer

As mentioned, the Internet, unlike mass advertising, enables advertisers to target messages and information to consumers more predisposed to finding the information relevant and therefore more likely to respond. Premiere Web publisher networks segment their web sites into targeted categories where consumers spend time on given sites according to their preferences and interests. Networks may include channels dedicated to broadband users, business-to-business, women, children, sports enthusiasts and other vertical audiences. This segmentation provides advertisers and ideal opportunity to create impactful and highly targeted campaigns, utilizing a mix of creativity, technology, and information designed to reach target consumers.

Monitoring and Tracking Results

In addition to customizing and optimizing advertising and direct marketing campaigns, technology available through the Internet has also made it possible to track results in real-time and make appropriate refinements as needed. For example, L90's adMonitor, the company's ad serving and tracking technology, provides both advertisers and Web publishers the ability to selectively target ads to Web users based on their specific interests and characteristics as well as track results in real time. The technology was recently pplied to a campaign for Tickets.com, a premier online resource for event information and tickets. The company required an online advertising and marketing solution that would: 1) Generate brand awareness; 2) Increase market share; 3) Drive traffic to their Web site; 4) Build a targeted database.

To accomplish these objectives, an integrated sponsorship program was designed featuring three premium entertainment and sports Web sites. Tickets.com was integrated into the content on these sites and positioned as the premier ticket buying and information resource. Included among campaign elements was a "Take Me to the Big Game" sweepstakes on one of the participating Web sites offering visitors the opportunity to win tickets to sporting events including the championships of the four major professional sports.

This technology was also used to capture the registration details at the Web sites on which the sponsorship was featured as well as to track the movement of visitors through the Web sites. Tickets.com used the information to create user profiles based on declared and inferred behavioral data and ultimately will use this database to create customized offers such as local sports or special interest tickets targeted to Web users or groups of users, targeting both their marketing dollars as well as their target audience even further.

Staying Ahead of the Technology Trend

The Internet has created new opportunities for targeted advertising and communications. Innovative technologies make it possible to communicate with consumers and to create programs that stand out. Online advertising and direct marketing solutions firms have taken fundamental advertising principles and created technology for the Internet that enables programs to be relevant, meaningful and targeted, thereby generating greater results. They have also eliminated many the challenges for advertisers by acting as an intermediary between online advertisers and Web publishers.

Technology that optimizes the use of the Internet is changing constantly. New features and services that you may want to incorporate into your online marketing program include:

Voice emails 

Privacy/Opt-In

Broadband

Viral marketing

Wireless platforms

Taking the plunge

Before you embark on your online marketing initiative, ask yourself the following:

What do you want to accomplish? Will you be satisfied with getting new consumers to your Web site or are you looking for specific, measurable changes in sales? Perhaps your objective s an increase in brand awareness and recognition. Maybe a viral marketing campaign is right for you. Think it through and work with counselors who are experts on what the Internet can offer and how to make it work for you.

Consider an ad network. The benefits are clear: Web publishers have an easier time getting in front of advertisers when they are part of a network and conversely, advertisers can more easily and effectively channel budgets and resources into networks that already provide immediate and targeted access to the consumers they want to reach. Many new Internet advertisers often run to portals, such as AOL, Yahoo! and Lycos to launch advertising programs. However, these large sites makeup less than 20 percent of Internet traffic. About 80 percent of Internet traffic exists within the smaller, vertical sites represented largely by ad networks.

Furthermore, your online advertising representative firm can be an effective intermediary between your off-line advertising agency and ;the internet, ensuring that your creative, key messages and brand positioning are well translated for the Internet. These Internet experts are also familiar with your audience and know where your target consumers are spending time and how to utilize the most effective and appropriate Internet communication vehicles such as: but that they utilize the most effective and appropriate communications vehicles such as: microsites, jump pages and viral marketing to deliver impressive results.

Make your campaign relevant and non-intrusive. While banner advertising is effective, response rates to continue to drop (stat) while results from other types of campaigns are on the increase. Armed with the correct information, your ad rep firm can design an integrated, online and offline campaign that will make the most of your budget.

Finally, follow the money. Monitor your results. Get your information real time and demand adjustments as needed.

John Bohan is CEO of L90, Inc., an Internet advertising and direct marketing solutions firm headquartered in Santa Monica.