eMarketer's Take on Online Ads

by Adam Bernard, Apr 25, 2001, 12:00 AM

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Researchers at eMarketer have just released their most recent eAdvertising report, which shows that despite the Internet advertising industry seeming to be on life support, there are no serious signs of anyone getting ready to pull the plug.

According to the widely quoted Jupiter Research study, at the end of 2000, almost three quarters of surveyed advertisers (73%) planned on spending more money on web advertising in 2001. eMarketer says that recent downturns in the economy may have drastically changed the actuality of those numbers, but it's the thought the counts - at least 4 months ago, advertising on the web made sense.

Despite all recent downturns, eMarketer says that essentially, online advertising has already become a significant part of integrated marketing strategies, and dollars are being shifted to it.

The report outlines three fundamental economic and technical drivers of web advertising:

1) Online advertising still holds out the promise of becoming the ultimate targeted communications vehicle.

2) Technology is evolving to allow for richer advertising content through increased broadband penetration.

3) It is now possible for consumers to make actual transactions through banner ads and email.

That being said, there are still major barriers to online ad growth:

1) Not all target audiences are wired (at least not to the same degree).

2) The online audience is highly fragmented.

3) Branding is questionable on the web.

4) Bandwidth problems limit creative options.

5) Internet users tend to be goal-directed, so anything that gets in their way, including ads, is perceived as an intrusion.

6) Advertisers have not cracked the problem of integrating online and offline advertising.

7) Personalization technology raises issues about privacy, and the use of personal information.

EMarketer says these seven barriers are being worked on, and should fall in time.

- Adam Bernard may be reached at Adambernard@mediapost.com