New digital techniques move Internet beyond banners
Just when I thought the marketing profession had come to grips with the Internet as a digital marketing medium, things are on the move again.
Industry trends that have emerged in recent months point to a decline of the web banner (and variants) as the digital media staple.
In a positive trend, however, as new Internet services emerge, banners as we know them are being superseded by a raft of highly engaging and even more compelling digital advertising and marketing techniques.
So what is driving the change? What forces are challenging the expertise of the online marketing profession? What technologies and media channels will be engaging users in future? How will these new digital media opportunities present value for marketers?
Broadband is driving the change
Figures from the various Internet service provider (ISP) market analysts show that Australia has around 1.8 million broadband users, and an estimated 20% of Australian households now have access. Broadband is growing at the rate of around 20,000 new subscriptions per week.
This is igniting a renaissance of more sophisticated and very heavy Internet usage that is unlocking its potential as an entertainment medium.
To highlight this phenomenon, the recent ‘Australians Online Neo Report’, co-authored by the Neo Group and Yahoo! Australia NZ, concluded that ‘neos’ (neos are a segment of Australian consumers characterised in part by their very heavy use of the Internet) were also heavy users of online entertainment services.
Neos are far more likely to download music, watch online sports telecasts and visit Internet radio and TV sites than the general population. This conclusion is further supported by the recent Nielsen ‘Australian Internet and Technology Report’, which characterises broadband Internet users as people who:
- Use the Internet more frequently and spend more time online.
- Are more likely to download/stream music and videos and play games.
- Have a larger repertoire of websites that they visit regularly.
The decline of the banner
It is worth considering a few more of the reasons why the humble banner is being superseded. The recent ‘Decade In Online Advertising’ and ‘Adserving Trend’ reports from DoubleClick (www.doubleclick.com) all seem to be leading to the conclusion that banner advertising is first-generation digital marketing that is:
- A narrow-band advertising format with limited communication potential.
- Suffering from declining click rates.
- Contributing to increased clutter through poor frequency control.
- Mainly used by a small group of advertisers; for example, the finance industry was the largest spender on display advertising (read banner ads), according to the recent ABVS ‘2004 Online Advertising Expenditure Report’.
In addition, there is a gathering consumer revolt against cookies, which are the main way that digital marketers track, optimise and ultimately account for their online marketing spend.
Reports are conflicting, but initial research findings by ATLAS Solutions (www.atlassolutions.com) suggest that while more and more Internet users state they are regularly deleting advertising tracking cookies (or have installed anti-spyware software that automatically deletes them), the impact of cookie deletion may not be such a problem for advertising accountability.
With that subtle reminder of the frailties of emerging media, let’s take a sneak peak at the types of content and services broadband subscribers can access via their entry-level broadband connection and how these are being used by marketers.
Really Simple Syndication
Really Simple Syndication (RSS) is a text-based streaming Internet service that provides web users with a convenient way to get the news headlines (as well as blog updates and other stuff) as they happen, without actually having to keep going back to a web site.
Surfers can subscribe to the RSS news headlines services they are interested in and read the full articles by clicking on the headlines. This will then open up the specific web page of the website that is providing the feed.
News feed aggregation programs such as SharpReader (www.sharpreader.com) are already significantly changing online news readership habits. For example, NYTimes.com’s RSS feeds generated 5.9 million page views on the site in March 2005, which represented a 342% year-over-year growth!
The massive increase occurred because RSS increased the distribution of NYTimes.com’s news headlines (thus increasing its readership) while also increasing the frequency with which news articles were being read (as the headlines were more readily accessible to readers).
Although the advertising opportunities of RSS are still taking shape, Google has experimented with placement of pay per click-style text ads (like those found in Google search results) that can be targeted to the advertiser’s choice of news feed.
Webcams and event casts
One of the upcoming opportunities for marketers looking to reach the younger, urban, beach lifestyle demographic is the live surf cams at www.coastalwatch.com.au
These automated 24/7 cameras at popular surf breaks (Torquay, Noosa, Manly) attract more than 150,000 unique visitors per month. The frequency of return visits is high, particularly when the surf is up during work and school hours!
The Coastalwatch surf report content is also being distributed to 3G phones and digital/interactive TV, bringing to life the possibilities of truly media-centric marketing that is fully integrated across the various digital media channels.
It is also interesting to note that the famous surf company Rip Curl has been webcasting big surfing events (www.ripcurl.com.au/events/). In many ways, Rip Curl is an example of a sport and lifestyle brand that is carving out a position by entering the digital media landscape with a privately owned and exclusively branded digital media channel.
Digital audio
Largely untapped by advertisers, digital audio/radio is an emerging but still highly fragmented digital marketing opportunity.
In addition to the massive catalogue of music for sale and download (now available in Australia), Apple Computer’s iTunes site offers at least 20 genres of music with more than 400 audio streams (Internet radio broadcasts).
Many of these streams have in-stream advertising, such as in normal FM radio broadcasts, but the frequency and number of advertisements is miniscule compared with commercial radio.
iPodder is a sort of personal video recorder (PVR) equivalent for streamed audio, allowing listeners to record Internet audio broadcasts (music, news, chat feeds) when they cannot listen to the scheduled program (see ipodder.sourceforge.net/index.php).
And now there is the Roku SoundBridge (www.rokulabs.com), which plays digital music files anywhere in the house by connecting your stereo or powered speakers to Internet radio stations.
This would seem to suggest that a whole new generation of audio advertising, in the form of sound bites, is just around the corner!
Downloadable games
Although in-game advertising has been around for a while, with big productions in recent years from the likes of Nike (Skorpion) and the Pepsi Shootout, online games have recently been provided with additional appeal for marketers.
WildTangent (www.wildtangent.com), a leading online game developer, has teamed up with 24/7 Real Media’s Open AdStream online advertising management and tracking system to deliver online, in-game advertising across the WildTangent games network.
According to a joint press release last April, “… the first downloadable game to feature this new technology, ‘Snowboard Super Jam’, will literally put two prominent international brands, Jeep and Oakley, in the game”.
We are also looking forward to the release of Xbox 2 and Playstation 3, both of which will be capable of interfacing with broadband Internet and wireless services.
Broadband ad formats prove themselves as powerful new
brand-building opportunities
One of the most obvious features of broadband is its ability to deliver
TV-like digitised advertising commercials that ‘pre-roll’ before viewing of your favourite games, video trailers and mini episodes. For some examples of how this works check out Macromedia Shockwave’s site at www.atomfilms.com
Some interesting research regarding the effectiveness of these new formats has come to light in a recent study by rich media technology firm Viewpoint and Dynamic Logic. It found that: “Pre-roll increased brand awareness 96% and message association 272%, compared with a control group”. Interestingly, the report also found that viewers considered online advertising in this format to be less annoying than television advertising! The full article can be read at http://www.clickz.com/news/article.php/3506921
Voice over Internet
Another development that is worth commenting on briefly is the evolution of Internet telephony services as a viable substitute for fixed line (PSTN) telephone services.
The always on, high-speed connection that broadband offers has enabled a rapid growth in Internet telephony services such as Vonage (www.vonage.com) and Skype (www.skype.com).
Yahoo! has launched Internet voice communications in its new beta version of Messenger (messenger.yahoo.com)
The emergence of these computer-based ‘soft phone’ applications provides some interesting opportunities for marketers, particularly where there is the possibility that these services could be branded and/or that consumer promotion budgets could be put to work subsidising usage costs.
In conclusion
Although we may be seeing the end of the humble banner ad as we know it, that is not a bad thing considering the potential of the new generation of digital marketing and media options that are emerging as a result of broadband.
The challenge for marketers will be how to deconstruct their current advertising and marketing mix to explore new marketing communication opportunities across an increasingly fragmented but high-speed digital medium.
Some of the areas for marketers to further investigate may involve the development of proprietary or exclusively branded media and partnerships with emerging content service providers.
Clearly, the use and reuse of video and audio ‘pre roll’-style advertising is just the beginning. We are moving quickly from digital media advertising that is ‘inactive’ to context-relevant, truly interactive digital marketing.
On a final note, it is arguable that some of the most memorable ‘advertising’ on the Internet has been created from ‘viral’ sources. Quite a few of them even pass the ‘brought tears to my eyes’ test that many banner advertising campaigns fail.
So if you haven’t seen Store Wars yet, here’s the link — www.storewars.org. Go on, watch it … and may the farce be with you!
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