• by Bill Freeman , December 22, 2000

by Bill Freeman

Negativity continues to mount toward the online advertising industry and many online advertising networks and technology providers continue to struggle. As strong as all the hype was touting the benefits of online advertising just a couple of years ago, the detractors are now even more vocal. But this is fine. Really. It's the way it is supposed to be. This is the natural cycle for any technology invention. Soon enough the smoke will clear, and most importantly, advertisers will learn how to use the Internet effectively. In turn, the solutions providers will learn how to make campaigns happen in a manner that is easy for advertisers to use and understand.

Throughout history, technology inventions have experienced a steep incline at the beginning of their lifecycle. Everyone jumps on board with excitement. Then, the initial enthusiasm wears thin and people begin to walk away as the product's novelty is replaced by criticism. Online advertising is no different. In 2001, I expect online advertising to continue on through that cycle with the best advertising technology and services companies managing to survive and inch toward profitability.

But before that will happen, advertisers need to begin thinking differently. If the online advertising industry is to reach a level of stability and growth, more advertisers need to learn how to use the medium effectively. Advertisers like the idea of their ads being measurable, but not enough have discovered how to achieve the results they seek.

One of the biggest problems is that many advertisers are still not looking at their online campaigns as part of a bigger puzzle. They are still being developed and thought of as a separate unit. More advertisers need to integrate their online campaigns with their offline efforts and follow the lead of their successful counterparts. The most successful advertisers in 2001 will be the ones that adopt a 360-degree approach and leverage the strength of their offline branding efforts on the Internet. Companies that marry their messages will be the ones who will find the best result, and more importantly, the best cost per acquisition.

Don't get me wrong. Online advertising is already working, particularly as a branding tool. According to a recent report released by Dynamic Logic, banner ads increased brand awareness by 6% after a single exposure and 10% if the ad was shown four times. In fact, recent reports have also shown that 63% of all online ads are geared towards branding. Other studies have shown that 32% of people who performed a completion (i.e. purchased, registered, etc.) actually did so without clicking on the ad and went straight to the advertiser's site at another time.

The misconception that online advertising hasn't worked is the end result of an industry looking at the wrong data - let's face it, completions should replace click-throughs in 2001 and beyond. And technology and service providers aren't helping by makin