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A Chat with a True Believer

Bill Wise is a soldier in the trenches of the embattled online advertising business. He heads DoubleClick's online media networks -- which link marketers with the Web audiences they want to reach. This used to be DoubleClick's bread and butter. But during the second quarter, for which it reported results on July 10, the media division made up just 33% of DoubleClick's $101.9 million in total sales.

Wise, who spoke recently with BusinessWeek Online Associate Editor Amey Stone, doesn't engage in debates about whether online advertising works. He's confident it does. His concern is that advertising online be evaluated fairly. He praised financial site CBS MarketWatch's recent decision not to report back "click-through" rates (the number of people who see an ad who actually click on it and are taken to the marketer's site) in its advertising reports as an important step for the industry.

The way Wise sees it, the problem with online advertising isn't that marketers don't want to spend online. They just want more flexibility about how and where they put their dollars. He's glad to see that publishers are more flexible about trying new ad formats in the current environment. Most of all, he sees "education and research" as the keys to helping advertisers create more effective online campaigns that will motivate them to spend more online -- no matter when the economy turns up. Here are edited excerpts of their conversation.

Q: How have DoubleClick's ad networks evolved in the changing environment for online advertising?

A: In March of this year, we reorganized our media networks to bring them more in line with the way we saw marketers spending. We created two networks: our Brand Network and our Audience Network. Brand is focused on top brands -- sites like Kelley Blue Book, Cheap Tickets, Better Homes & Gardens, and Nasdaq. It offers integrated sponsorships, allowing customers to link their brand with other brands.

The Audience Network delivers reach and eyeballs. We segmented the audience of 1,000 sites into 30 niche categories. Marketers can buy one niche or a certain demographic. More and more marketers are looking to reach a specific audience, not a specific site. The great thing about our structure is that we have the brands, if that's what the marketer wants. We also have the audience if you're looking to reach a certain demographic.

Q: What is the best way for advertisers to reach consumers online?

A: It all depends on what the marketer's objectives are. The Internet has great flexibility. Whatever their objectives are, we have solutions for it. Different marketers come back and say different types of ads work best. For some direct-response marketers, e-mail and instant-messaging advertising can work. We're looking into lots of different new models for advertising online. I can't go into too much detail here, but you'll hear more from us on this in the future.

Q: What can sites do to attract advertisers?

A: In the current market, publishers need to be more flexible. They're more open to using rich media in advertising and different-sized ads.... If nothing else, the current market opened the door for publishers to be more flexible about using more innovative technology in advertising.

Q: What's happening with pricing of ads online?

A: I can't get into that too much. But we're continuing to charge on a CPM [cost-per-thousand ad impressions] basis. Some sites are going to CPA [cost per action], but not us. We can still meet marketers' objectives -- whether it's to build brand awareness or generate a lead or a sale -- without going to that.

Q: Aren't a lot of marketers skeptical about building brand on the Web these days?

A: We've done a lot of ad-effectiveness studies through our Diameter research division that show conclusively that branding works on the Web. There's a lot of [educating] that we need to do. We're adding research to our sales efforts, both before the sell and after, to measure the campaign's effectiveness. We can do studies that show the impact an ad has had on brand awareness.

CBS MarketWatch [just] announced that it's stripping out click-throughs on its reporting. That's a great thing for industry. The online advertising industry shouldn't be judged based on how many click-throughs an ad generates -- unless the stated goal of the marketing campaign is to direct traffic back to a Web site.

Q: How should the effectiveness of online advertising be measured?

A: The measurement has to be closely tailored to the objective. We as an industry have used click-throughs, but that's just one of many ways of looking at advertising effectiveness.

Q: Should online advertising be done separately or as part of an overall marketing plan?

A: The Internet should factor into a company's overall marketing mix. I don't think it should be Internet vs. TV vs. print or radio. The goal is to use online to extend the brand and increase reach. Online is more and more accepted as part of the whole marketing mix.

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