Online Ads: Will Fewer, but Bigger, Be Better?
With the rise in recent years of search advertisements—the little snippets of commercial text that appear next to search results—online display ads don't get much respect these days. While search ads are expected to grow about 9% this year, revenues for pictorial display ads may actually fall. Now, several major Web sites are hoping to rekindle interest in display ads—especially those used for creating a brand impression rather than simply eliciting a click.
On Mar. 10, the Online Publishers Assn. (OPA) is announcing a trio of new display-ad formats that it hopes will spark more creative use of the Web's mainstay ads. The main goal is to engage readers more fully, and in the process allow online publishers to charge advertisers more. Not least, the initiative offers an alternative to the increasing encroachment of cheap ads served on their sites by advertising networks, which many premium sites think are devaluing their ad space.
The three new ad units are all bigger than standard display ads, and potentially they'll be the only ad on the first screen. They also will be more interactive, even allowing viewers to bookmark them the way they do Web pages so they can come back to them. They include a "Fixed Panel" that's 336 pixels wide and 860 pixels tall, and scrolls to the top and bottom of a page as the user scrolls; an "XXL Box" that's 468 by 648 pixels, featuring the ability to embed video; and a huge 970-by-418-pixel "Pushdown" ad that opens up and then rolls up to the top of the page.
The publishers taking part include a wide variety of sites—including this one—run by outfits such as BusinessWeek (MHP), The New York Times (NYT), Time (TWX), Martha Stewart Living Omnimedia (MSO), USA Today (GCI), and others, accounting in total for two-thirds of the U.S. Internet audience. They've each committed to offer at least one of the ad formats by July.
Challenging the Ad Networks
The idea is to give more room for creativity to brand marketers—who, like the publishers, fret that the Web isn't providing them the ability to get a message across that's anything near as engaging as television or even print ads. "A disproportionate amount of money is spent on direct-response ads," such as Google (GOOG) search ads and "click-here" pitches for credit reports or dating sites, says Martin A. Nisenholtz, senior vice-president for digital operations at the New York Times Co. "The Web should be getting more branding dollars."
The new formats are a clear shot across the bow of ad networks. Many of these middlemen, which serve as brokers between advertisers and Web sites, are focused on delivering those direct-response ads by the ton. The ad units will be available only through the direct sales forces of OPA members, which don't include ad networks and most portals such as Yahoo (YHOO). However, ultimately advertisers and agencies will be able to run these or similar ads anywhere if they see they're getting results.
At least one agency head, albeit provided as a reference by the OPA, says the new ad formats look promising. "This will help to reduce clutter and to some extent prevent the Web from becoming a direct-response junkyard," says Andreas Combuechen, CEO and chief creative officer of Atmosphere BBDO, the digital agency of agency giant BBDO. "Search has taken a lot of the attention. The industry needs something new to get reinvigorated."
The Interactive Advertising Bureau, a trade group made up of publishers, portals, ad networks, and others, also said it welcomes new ad formats that allow for more creative ads. "It's a great step," says Sherrill Mane, senior vice-president for industry service at the IAB, which among other things sets online ad unit guidelines.
New Formats Face Hurdles
Still, the formats face a number of challenges. For one, they take over more of the screen, and in a potentially interruptive way for the user. If they annoy more than they engage, such ads could backfire.
Perhaps even more important, marketers hesitate to use ad formats unless they're widely adopted. The fact that so many premium online publishers are promising to offer them does help. "That sounds like critical mass," says Andy Atherton, chief operating officer at Brand.net, an ad network devoted to brand ads.
But because wide use matters, some ad industry leaders question the wisdom of limiting the formats to sale by just the OPA's publishers, which could slow adoption as an industrywide standard. And despite recent talk among some online publishers about how standard online ad formats have helped ad networks make commodities out of ad space, standardization ultimately is key. Advertisers and agencies simply don't have the resources to do even more versions of ads for the same campaigns, since they're already spreading those resources across traditional media, Web sites, social networks, and mobile devices.
In any case, the ads will have to show rapid and measurable success to catch on widely. Just how that success will be measured remains unclear. OPA President Pam Horan says publishers hope to use traditional brand-awareness measures, though the association isn't yet specifying what those will be. Marketers, who have grown accustomed to measuring results increasingly with clicks, will want to know before they go whole hog for the ads.
Distinction for Premium Publishers?
Nisenholtz at the New York Times clearly views the ads as something that will set premium publishers apart from other sites. "The whole purpose of this is to map the quality of the creative [ad] to the quality of the sites," he says. "Part of the problem is that much of the Web is a sewer."
While a lot of people rightfully would argue that what's a sewer is in the eye of the beholder, Nisenholtz's brush-off of the rest of the Web doesn't negate the larger point: There's a burning need for new forms of online advertising that go beyond the click to give advertisers more flexible, creative ways to engage with potential customers. If the OPA's formats work, that will help publishers, advertisers, and users alike.
The only mystery is why the industry hasn't done this sooner. It's probably because online advertising was growing fast enough until recently that few sites needed to. But with the second dot-com bust looming ahead, they do now.