by Bob Tedeschi (New York Times)
 
 
 
 
 
 

[A] dvertisers accustomed to 30-second television
commercials and full-page print ads have long
criticized Internet ad banners for being too small, too
dull and incapable of luring viewers to another page.
The most skeptical among them have begged out of
Internet ad spending altogether, as if the banners were
a disease that only higher bandwidth would cure.

With the release of a new report, the lowly
Internet ad banner may 
finally get some 
respect. 
According to a study 
conducted by 
NetRatings, a Web audience measurement company, sites that invest in even a modest banner advertising campaign can significantly increase their audience size,
regardless of the number of people who actually click on
the advertisement. The report, which is based on the
activity of 3,500 adults who access the Internet at
home, found that there is a "significant correlation
among sites who consistently advertise" online and
increased audience size.

"This shows that it is possible to drive traffic with
banners, and that they do, in fact, work," said David
Toth, chief executive of NetRatings. "It also shows that
people who only look at click rates are going to find
that their premises are wrong," he said, referring to
the rate at which viewers click on a banner ad.

The NetRatings study compared the levels at which a
site's banners were viewed over recent months with the
number of individual users who visited that site at
least once during that period (a number referred to as
"unique visitors").

For example, the study found that the number of people
who visited GoTo.com, a search site, increased 24.9
percent from June to July 1998, to 3.1 million visitors.
During the same time period, the number of Web banner
ads promoting GoTo.com grew 53 percent, to 237 million impressions (which refers to the total number of times an ad is viewed).

------------------------- Similarly, the number of people who visited the
Microsoft Network's Car Point
 site at least once increased
 44 percent from June to
 August, 1998 to 1.05 million
visitors. During the same
 period, the number of Web ad
 in banners promoting the site
Technology grew 22 percent, to 22.7
million impressions.

While the sites mentioned in
 the study advertise heavily
on the Web, Sally Blodgett, a
I.B.M in Argentinian spokeswoman for NetRatings,
Investigation said, "We don't claim an
absolute direct causal
relationship" between
 increased advertising and
increased audience, because
 "other factors, like the
 number of links to the site,
can also affect unique
 audience growth. But we
definitely see a significant
correlation between
consistent advertisers and
unique audience growth."
 

The NetRatings report
underscores a recent study by
Millward Brown Interactive, a
Web marketing and research
------------------------- company, which showed that
banner advertisements can
have a significant effect on both brand awareness and
buying behavior. The study, financed by the Internet
Advertising Bureau, a trade organization, focused on the
behavior of over 16,000 Internet users, and found that
when they viewed even a single ad banner, they showed a "dramatic increase" in brand awareness and a "positive
impact on intent to purchase."

According to MBI, the respondents were randomly sampled from over 1 million visitors to 12 high-traffic Web sites such as Excite, Geocities and Lycos, where they were exposed to an ad, and subsequently surveyed.

The two reports are in sharp contrast to sentiments
expressed in recent months decrying the effectiveness of
banner ads. Advertisers have criticized them for
attracting meager click rates (between one and two
percent on average), and at Internet advertising
conferences this summer, banner detractors indicated
they would withhold major spending campaigns until the next wave of technology provided a more palatable
advertising alternative.

Despite advertisers' complaints, not ------------------
everyone has such high expectations 
for the new medium -- especially 
those trying to make money from 
Internet advertising. "This is like 
flying planes in the '60s," said 
Kevin Ryan, chief executive of 
DoubleClick, an Internet marketing 
company. "People were saying, 'Sure,
you can fly to Paris, but this won't 
really be big until you can go to the 
moon.' Well, maybe so, but in the 
meantime, you've got a great product 
for the next 50 years."
Forums
Ryan also defended the one percent 
click rate as "substantial, when you 
look at volume. We serve 100 million 
ads a day. That's 1 million clicks
just from us. That's a tremendous value above and beyond branding," he said, noting that demand for banners is increasing "dramatically."

But to those for whom one percent click rates still look
meager, banners remain a useful tool for generating
brand name recognition.

"Our banners are actually games you can play, so it
helps brand our site as well as drive traffic," said
Steven Yee, vice president of marketing for Sony Online
Entertainment, producer of The Station@sony.com, an
entertainment site.

Yee said the site's banners have generated click rates
of "substantially higher than 2.5 percent," primarily
because of the attractive banner designs. "So to make
banners work, it's about really knowing the constraints
of the medium and working within them," he said.

It also helps to approach a banner campaign with some
planning, some advertisers said. "It's not just about
buying a bunch of banners," said Richard Goebel,
director of business development for NextCard, a company that issues Visa cards over the Internet. "It's about what you say in them, where you place them, when -- and even your product. If it stinks, no one's going to want it."

So if companies like these are embracing banner ads, who are the voices of dissent? According to Evan Nuefeld, a senior analyst with Jupiter Communications, they are the traditional mainstream advertisers, who he thinks may be shunning banners out of ignorance. "And in my opinion, I think they're just using this as an excuse not to use them, because they don't fully understand them," he said.

"Banners are the whipping boy of the Internet," Nuefeld
said. "But our take is that banners do certain things
very well -- like drive traffic -- and that over time,
they will become the workhorse of the online media buy," he added, noting that the NetRatings report "provides some more evidence of that."

Ryan, of DoubleClick, agreed that the recent reports
could help change naysayers' perceptions. "I'm glad this
is coming out," he said. "Now, hopefully more people
will listen."

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* NetRatings

* Goto.com

* MSN Car Point

* Millward Brown Interactive

* Millward Brown Interactive study

* Internet Advertising Bureau

* DoubleClick

* The Station@Sony.com

* NextCard

* Jupiter Communications

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Copyright 1998 The New York Times Company