Beyond the Banner
By Greg Jarboe, VP & CMO, Backbone Media
ICONOCAST
January 16, 2002
They are called MicroAds, AdWords, pyRads, HTTP Ads and
sponsored links. These unobtrusive, text-based advertisements have proven
popular with users, offering advertisers attractive low-cost, self-service
alternatives to banners, notes Mathew Honan in a recent
Online Journalism Review article.
The field was pioneered by Google, which launched its AdWords
Program in late 2000. Here's how it works. An online marketer selects
keywords and phrases. When users search for one of these terms, the online
marketer's short, text-based ads are displayed
on the right side of Google's results page.
While click through rates (CTR) for 468x60 banners have
dropped to the current industry average of 0.2%, AdWords on Google have
average CTRs of more than 2.0%.
Honan reports one Web-hosting business had CTRs as high
as 10.0% for specific keywords, although the company also bought a keyword
on Google that was too general and got no results. At prices ranging from
$8 to $15 per thousand impressions, AdWords are so cheap that e-marketers
can test a variety of keywords and phrases to see which work best.
Honan also tested MicroAds on Blogger and Metafilter to
see if they worked as well on independent publishing sites. His CTRs ranged
from a low of 0.78% to a high of 2.03%.
Honan's anecdotal evidence confirms one of the key findings
of an ad acceptance study I commissioned in the spring of 1999. Conducted
by IntelliQuest, the study asked college students, faculty and administrators
to rate how desirable or undesirable they found different types of Web
advertising. (Because the study was conducted on the Internet, it was
able to show examples of each format.)
More than 600 respondents rated sponsored links as the most
desirable and full banners as the most undesirable Web advertising format.
In other words, people believe that a few words of copy and a hyperlink
are as useful as the Yellow Pages, which helps them find what they're
looking for, but graphic banner ads are as intrusive as telemarketers,
who call at inconvenient times selling unwanted things.
While it was too labor intensive to create sponsored links
in 1999, e-marketers can harness their popularity more cost-effectively
today. According to Honan, HTTP
Ads and pyRads
are both trying to become the DoubleClick of MicroAds, and even Google
is talking about syndicating its AdWords Program.
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