IQ News: A Brand New Game

Does new research prove the branding value of banners? Before a roomful of top names in Internet marketing last fall, Rex Briggs declared that reports of the death of the online banner had been greatly exaggerated. As research director of HotWired, Briggs had in his hands an extensive study to back him up. The report, prepared by the Wired Ventures digizine and Millward Brown International, a marketing research firm owned by WPP Group, stated that banner ads work. They get noticed, Briggs said, and they prompt Web surfers to remember and even consider the brands that advertise. On the surface, the study could have been seen as just another slick sales tool amidst a sea of hype and claims about online marketing. But for online sales executives aware of the amount of money spent on brand campaigns in traditional media advertising, the results of the HotWired research, and other studies like it, could be worth millions of dollars in client media budgets. In a world where coat-check tags and parking meters serve as branding vehicles, even primitive online ad banners can now carry a value beyond a click-through signpost. In the HotWired study, 30 percent of respondents recalled seeing specific online banners, with a 12-200 percent increase in brand awareness against a control group that didn't see the banners. And the purchase intent for respondents-the Holy Grail for marketers-rose 5-50 percent for the brands that were tracked. Despite the wide berth cut by those figures, Briggs views the study as a watershed. He suggests the report has kicked off a new way of thinking about what brand advertising can achieve on the Net. "The biggest shift [by marketers] has been from a focus on a mega-Web site to 'maybe there's a better way to reach the consumer,' " says Briggs, who is now a vice president of MB Interactive, a unit of Millward Brown devoted to online marketing research. Since the HotWired report, several other in-depth studies of online banner ads and consumer awareness have been conducted. Last month, America Online released its own report in conjunction with ASI, a Stamford, Conn.-based research firm. Naturally, it comes out positive on branding on the Web. Banners work especially well in AOL's chat rooms, which are among its most highly visited areas and where members spend a lot of continuous time online. According to the study, 41 percent of respondents remembered an ad on AOL when asked about it at a later date. Their intent to purchase increased as much as 9 percent. Other research studies on the subject have been completed by Grey Advertising, Berkeley Systems and Forrester Research. All of these have set the stage for a report expected to be released this week by the Internet Advertising Bureau and MB Interactive. It promises to be the most comprehensive analysis to date, because it measured a wide range of sites, advertisers and 16,000 users. The Internet "is the most underrated medium in terms of branding," says Rich LeFurgy, IAB chairman and senior vice president of advertising at ESPN Internet Ventures. The IAB and MB Interactive are tight-lipped about the study's details, but sources say it, too, will come out thumbs-up about online advertising as a branding vehicle. In fact, brands that have not ventured onto the Web may soon feel some discomfort among their Web-loyal customers. According to Briggs, one-fourth of all users surveyed had unflattering perceptions of brands that did not advertise online. "For certain brands, not advertising on the Web may be negative for the brand, because people are passionate about the Web," says Briggs. The hard numbers in the reports will give online sales executives and marketers the ammunition they need to get deeper into client's budgets. Rather than just say "trust us" or "this is the coolest place to be," they can provide media planners with quantitative support. Myer Berlow, senior vice president of interactive marketing at America Online, was at first a bit skeptical about the HotWired survey. Then he took a closer look at some of the specific brand results. "I saw data from an apparel marketer [in the study] and said, 'Gee, that's kind of interesting.' " The clothing maker, which MB Interactive would not disclose, found that 31 percent of the Web user group exposed to its banners had an interest in buying its products; only 18 percent of the control group reported an intent to purchase. Of course, not everyone is convinced by such focus-group reports. "The Web is not a good place to do branding," says Bill Doyle, senior analyst of media and technologies at Forrester Research, who released his own branding report in August. (Forrester, notably, is the only report sponsor that does not have a vested interest in concluding that banner ads are worthwhile.) Doyle claims online branding doesn't work well right now for a variety of reasons. There isn't enough reach among the demographic groups major advertisers want. The lack of bandwidth and slow modem speeds at home greatly limit the animation capabilities of most online ads. Most Web sites have poor or negligible measurement systems in place to track users. Production headaches abound. As a resut, Doyle concludes, the Web "will remain a poor venue for branding . . . brand dollars could well sag." He predicts advertisers will continue to experiment with branding on the Internet in the near term, raising overall brand spending to $450 million in 1998. Then comes the falloff: a span of at least two years in which advertisers will pull back on online brand advertising until its drawbacks are resolved. For a glimpse of a bandwidth-rich future, however, the You Don't Know Jack game site on the Web is a good place to go. The show, from Berkeley Systems, runs 10-15-second interstitial ads-sponsor messages that take up the full PC screen while new content loads in the background. The result is a television-like experience, with ads that include audio and video. MB Interactive did a study this year for Berkeley Systems on the branding effectiveness of interstitials. Its findings were upbeat, even by TV standards: Ads on Jack generated brand recall of 64 percent among those surveyed. "Jack is a great place for ads, because I expect it" to be like TV, observes Greg Smith, director of strategy at Saatchi & Saatchi's Darwin Digital, which handles online media for clients such as Bell Atlantic, General Mills and GeoCities. Still, it's the garden-variety banner ad that will have to be proven as a branding weapon on the Web. With their research studies in place, online sales reps now have to fly their banners high. Brand Awareness of Ad Banners .........respondents who recalled seeing ad online.....brand awareness increase .....purchase intent increase HotWired.....30%.....12-200%.....5-50%..... (Sept. 1996) Berkeley Systems.....64%.....7%.....14%..... (Aug. 1997) America Online .....41%.....n/a.....2-9%..... (Aug. 1997) Internet Advertising Bureau .....49%.....5%.....n/a..... (June 1997)

Brand Marketing

IQ News: A Brand New Game

Laura Rich

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Laura Rich