Internet Advertising Is under Assault

Article excerpt

In its early days, Internet advertising offered what seemed to be a distinct competitive advantage over its older, offline kin: measurability.

Throughout the history of advertising, it has been notoriously difficult to draw a direct line from a given piece of marketing -- a TV spot, a magazine ad -- to a sale. "The Net, though, is different," according to one reasonable-sounding argument that was expounded in Wired magazine in 1996.

"The Net is accountable," the Wired article said. "It is knowable. It is the highway leading marketers to their holy grail: single-sourcing technology that can definitively tie the information consumers receive to the purchases they make."

At the time, Procter & Gamble had provided support for that thesis by deciding to base payments for its online advertising on click-through -- the number of times a Web surfer was interested enough in an online ad to give it a click. Suddenly, all those other unaccountable forms of advertising, not to mention the media companies that depended on them, were thought to be in serious danger.

But measurability has not turned out to be the great strength of Internet advertising. It has turned out to be its most conspicuous weakness. The problem is that it is hard to prove that no one is paying attention to a given television commercial. But it is easy to prove that practically nobody is clicking on a Web ad, leading to a perception that most online ads do not work.

The upshot, a recent Jupiter Media Metrix report groused, is that many marketers are still incapable of evaluating online ad spending effectively. Instead, the report said, marketers "focus on quantitative metrics like the cost per click and cost per conversion, not on more qualitative metrics like lifetime customer value and cost per shift in brand perception." A separate Jupiter report argued that "the actual number of customers that Internet advertising generates is often several multiples above what is tracked directly."

Last month, Marketwatch.com announced that it would no longer even report click-through rates to its advertisers unless they specifically requested them. "It's a meaningless measurement," a company spokesman said in an article in The Industry Standard.

Of course, the actions of a Web site like Marketwatch.com are less crucial to marketing trends than the actions of a Procter & Gamble. But still, the click-through has been under assault for quite some time, and the question now is whether an online marketing paradigm will be built around some new, better, more precise group of measurements or will fall back on the squishier evidence that advertising has traditionally relied upon.

Tom Sperry, president of the Atlas DMT technology division of the Seattle digital marketing firm Avenue A, suggests that click- through will not go away but will be supplemented by an array of emerging measurements. …