Re: Transactions in the banner

From: Patrick Goodrich <pgoodrich_at_xaphon.com>
Date: Thu 20 Apr 2000 13:30:31 -0700

DARLA STEVENS WROTE:
> Rich media seems to be gaining acceptance in the online
> advertising world. I recently heard about a banner
> that expands when clicked to enable the customer to
> complete their purchase without ever going to the
> retailer's site. Are there any statistics on how
> successful these banners have been? Are a large
> number of sites accepting these banners? I'd like to
> read what other members of this list think about them.

We have developed just such a solution, which we are
calling our X:Stream Action because it isn't exactly a
banner ad, though it looks like one. For strategic
reasons, we have not yet released it yet, but ad
publishers and clients who have seen the prototype are
eager to start running them. We can't offer you any
hard data yet on the performance of our solution, but I
can tell you a few specific things about Rich Media ads
that you might find helpful.

1. Clickthrough -- The Biggest Obstacle

As you know, clickthrough is typically the largest
deterrent to advertising objectives. You can see this
when you look at average clickthrough rates and compare
them to average conversion rates. CTR has come down to
an industry average of less than 0.30% lately, but even
with this disappointing turn of events, we are still
experiencing acceptable conversion rates averaging 25%
to 40% and more for targeted advertising, and
non-targeted advertising ranging between 7% and 12%.
The conversion rate and acquisition cost are,
ultimately, what count.

Granted, the additional filter of clickthrough can
ensure a more targeted demographic hitting your
conversion page, but there are still many ad viewers
who have some interest but are unwilling to click an
ad. This accounts in part for some of the branding
effect of online advertising, and the portion of
increased traffic not directly attributable to banner
clicks that is often seen when an online campaign is
run. These are interested viewers coming back later,
though they were unwilling to leave what they were
doing when they saw the ad. Take away clickthrough and
you increase eyeballs to your conversion creative
(point of purchase, sign-up form, etc.)

Increased eyeballs on conversion creative translates to
more conversions. This is what Rich Media advertising
delivers.

2. Internet Ads: A Functional Hierarchy

a.. GIF -- Viewers like to be able to interact and
exercise some control. Standard GIF ads don't allow the
user any control whatsoever.

b.. HTML -- Statistically, HTML ads achieve higher CTRs
than GIF ads. HTML ads allow the user to fill in
fields, check boxes, select items from drop-down menus,
etc., essentially to tailor their experience. This
increases clickthrough and conversion.

c.. Rich Media -- These ads tend to perform better than
HTML ads because they offer some form of compelling
content, really slick animation, sound, interactive
games, etc., that interest viewers and pull them in.
Most Rich Media ads carry the disadvantages of rather
large file sizes, slow load times, and some
technologies that can cause browser crashes. We have
read reports of 1700% increases in viewer response
compared to GIF banner advertising. "Even Yahoo now
accepts rich-media banners because advertiser demand is
so great. That's at a $40-$200 premium CPM, with
click-through rates on Java, Flash, Enliven and Unicast
campaigns ranging from 3 to as high as 10%."
(MediaPost, 4/3/00) As of the end of 1999, Rich Media
ads constituted 4% of the year's $4.6 billion online
advertising spending. "Jupiter Communications announced
that Rich Media, or variations of banners that are
"enriched" with Java, audio, video, or more elaborate
animations (i.e. Macromedia Flash), will make up as
much as 60% of online ad spending by 2002, equivalent
to a $5.3 billion share of the $8.8 billion Jupiter
forecasts will be spent online in 2002." (ICONOCAST,
3/23/00)

d.. E-Commerce -- Fully functional commerce ads allow
the user even more control than an HTML ad, further
increasing the likelihood of user interaction and of
conversion - note that clickthrough is no longer a
factor. Again, most of these on the market today (at
least all of the ones we've seen) are big files and
take a long time to load. As previously mentioned,
certain technologies used in some of the proprietary
Rich Media ad types are known for their instability. "A
Milward Brown Interactive study in March 1999 tracked
brand perceptions of three online advertisers: Intel
Corp, Novell and Barnes and Noble. . . . Rich Media
E-Commerce ads raised brand perception for Intel by 15%
and for Novell by 32%. Clickthrough's for all three
companies increased by 340%." (e-Marketer Quoting
Wired, 3/99)

e.. X:Stream Action (TM), which we plan to launch next
month, has total e-commerce capability as well as the
ability to offer any amount of multimedia or other Web
content. It loads as little as a well-optimized GIF ad.
Once loaded, other content is called from the server
only as the user requests it through interaction with
the ad. This interactive content is deployed in similar
time and fashion as any Web site content. This allows
the advertiser to give the user more control, a wider
diversity of content, more stability, short load times,
and full commerce capability right in the space of an
ad.

In this context, e-commerce ads seem to be the next
logical progression, greatly shortening the distance
between first customer contact and closing the deal. I
hope this has been helpful.

Best regards,

Patrick Goodrich
Director of Client Services
XAPHON
Interactive Advertising
www.xaphon.com
pgoodrich_at_xaphon.com




Received on Thu Apr 20 2000 - 15:30:31 CDT