On-line ad spending is rising and so is the competition for consumers' attention, forcing Internet marketers to become more creative.
According to ZenithOptimedia, a division of international media services company Publicis Groupe, the Internet's share of global ad revenue increased by 21 per cent in 2004 and is now the "fastest-growing medium." But as the demand for on-line ad space has increased, so has the amount of page clutter as sites try to squeeze more in. That can have negative repercussions for consumers who are increasingly being bombarded by promotional messages, but also for advertisers who want to see a clear return on their investment.
In a study released last year, Internet ad services company Burst Media LLC found that cramming too many ads onto a website "diminishes the effectiveness of advertising messages and can negatively impact consumers' brand perception." It said 73 per cent of Internet users surveyed pay less attention to ads that appear on a cluttered page, and more than 50 per cent have a less favourable opinion of an advertiser's product when they see it on a page they perceive as carrying too much advertising.
When it came to defining clutter, 62 per cent of those surveyed said they have a low tolerance for more than two advertising units per page. Burst Media estimates the average number per Web page today is three, a tally that could rise as more advertisers take an interest in popular sites.
As the competition for Internet ad space increases, some companies think the solution to garnering positive consumer attention on-line may just lie in an off-line advertising mainstay: product placements that are integrated into the editorial content itself.
"The more clutter, the greater the breakthrough that is required," says Eric Schneider, chief executive officer of Redwood Custom Communications, a Toronto-based company specializing in branded advertising content. "Branded content is educational and informative, and builds a relationship with the customer as opposed to being a hard push like a banner or button ad."
For more than six years, Redwood has been creating websites, e-mail newsletters and direct mail magazines that showcase its clients' products and services within a package of informative content. For U.S.-based lending and realty service exchange LendingTree LLC, for example, the company developed an on-line consumer education centre that provides financial information and advice in the form of original articles. Instead of framing them with traditional on-line ads, links to LendingTree's mortgage, personal and home equity loan applications are embedded in the text.
"The consumer education centre helps us reinforce our brand values -- in this case, empowering consumers to make smart borrowing decisions by providing educational content about different types of credit," says Bridget Smith, education marketing manager with LendingTree.com. "It also drives incremental volume for LendingTree, so it's a brand-building tool that pays for itself."
"It's about getting people to really think about LendingTree and their solutions," Mr. Schneider says of the year-old initiative. "It creates an experience with the brand, and reduces the competitive landscape."
Offering similar opportunities is HGTV.com, the on-line counterpart of Home & Garden Television. The site recently developed an interactive kitchen design centre that incorporates products from advertiser Viking Range Corp. Visitors choose from among various kitchen styles, then design their room by selecting paint colours and rearranging countertops and appliances. In a classic example of product placement, the appliances featured are all from Viking, and they're linked to on-line product spreadsheets and the company's own site.
"We're always looking for ways to take advertisers beyond banners and integrate them into the content in a way that makes sense and is beneficial to the users," says
Jim Sexton, vice-president of HGTV.com. "For Viking, there are no competitors [on the page] so they get exclusive exposure. And for consumers, it's useful information as opposed to just advertising."
In the first 10 days, during which time there was very little promotion on the part of HGTV, the section received more than 1.2 million page views. The average visitor spent about seven minutes interacting with the Kitchen Design Center and the Viking brand. Compare that to the results of the Eyetrack III study -- conducted by software company Eyetools Inc. in conjunction with the Poynter Institute and the Estlow Center for Journalism and New Media -- which found that the average user looks at an on-line ad for 0.5 to 1.5 seconds.
Only a handful of websites and portals are currently offering product placements, because it takes a lot of staff time to customize a campaign. Cost depends on the type and amount of content involved. It's something most sites don't advertise, but which they'll consider if an advertiser broaches the subject.
The campaigns typically cost more than simple banner ads, because generating the content represents a lot of work, but the host websites like them because product placements tend to require a much larger investment on the part of the advertiser and generate more revenue.
"We see this kind of thing as very important," HGTV.com's Mr. Sexton says.