The future of online advertising

Here’s a prediction: Expect online advertising to increasingly resemble television commercials. Soon there won’t be too much difference between an advert you see on your TV and an advert you see on a website you are visiting. They may even be one and the same thing.

As technology and bandwidth on the web advances, so advertisers and their agencies are increasingly deploying rich media to funk up their online campaigns. Rich media means smoother, silkier online ads that make use of animation, video and audio to deliver The Message. It means online adverts should increasingly becoming whiz-bang multimedia experiences — a far cry from the rigid, epileptic animated gif ads of the early web.

So imagine you are reading a news article and the advert block adjacent to the article bursts into life with sound and a short video animation of the latest car to hit our shores. In a sense, it’s no different from adverts placed around newspaper or magazine articles – except these ones come alive. You could watch the advert, you could interact with the advert – and if the advert is not for you, you should even be able to switch it off.

Rich media is a phenomenon making waves. International research house Jupiter Media says rich media adverts will account for half of all online ad impressions in the US by 2009. However in South Africa, our challenged bandwidth environment means rich media is a poor cousin at the moment.
But there are hints of what is to come on the local web. A tiny handful of advertisers have experimented cautiously with video and sound in their online campaigns — even though they are fighting against bandwidth constraints.
Andrea Mitchell, who is a media director at Acceleration, says she is starting to see increasing demands from advertisers for “something different”.
“Advertisers want to stand out, and as the online advertising spend in SA increases, so too will the demand for ‘prime’ space.  Rich media can certainly help alleviate this demand,” she told me.
Mitchell acknowledges that take-up of rich media in SA has been slow because of squeezed bandwidth.  However, she emphasises that with the imminent arrival of the second fixed telecoms line operator the demand is likely to increase.

“The technology is already available in South Africa and more and more creative agencies are waking up to the potential of rich media as an exciting part of the communications mix. We will hopefully see a very different SA online landscape — one that includes innovative and creative ideas coming into play, with a substantial increase in online ad spend to back it up,” she says.

Some argue that this form of advertising will irritate online users – who already have their knives out for online advertising as it increasingly encroaches on content space. It’s a particularly sensitive issue on the web because adverts add to download time and are often seen as an intrusion.

I’m not sure what the fuss is about — like many new things, there is always a period of initial user resistance but then eventual acceptance. It was probably no different when commercial breaks were first introduced during TV movies. In any case, in the high bandwidth-environment of the future, the extra download of online advertising will be negligible.

Also, as Mitchell points out, it is possible to detect connection speeds and serve rich media ads to only those users with high bandwidth.
Some major online US publications have used rich media ads as interstitial adverts – the ad shows before a user reads the article. It’s a form of advertising which is similar to TV, where a viewer watches an ad before or after they watch a show – not the traditional form of online advertising, which happens at the same time an article is read. This controversial form of advertising is hardly used at all in South Africa, but has been successfully deployed by major US online publications such as and New York Times.

Whether the ads appear before you read an article or at the same time you read the article is up to the publisher and advertiser involved. Rich media will bring the web alive but also make online advertising that much more in your face. It may however not raise too much ire from users because these sophisticated ads should be easier and a whole lot more pleasurable to watch. That’s my guess.

Some forms of online advertising

Animated gifs
Advertising of the early web. Still most common form of advertising on SA web.
Rich-media flash adverts
Used fairly widely and gaining rapid ground. Boasts smoother transitions and better image handling. Also handles audio efficiently.
Rich-media video/audio adverts
Not very common and still in an experimental stage in SA. As bandwidth improves this format will grow and online advertising will probably resemble TV commercials.
Contextual search adverts
Network pay-per-click advertising relevant to specific page of content, pioneered by Google and others. Mostly text-based, but now also includes images. Arguably one of the most successful forms of advertising on the web.
Sponsored links
Simple link to advertiser’s website from publisher’s site. Widely used with fair amount of success.
A joint venture between publisher and advertiser, where publisher brands or “white-labels” the advertiser’s service and revenue is shared.
Despite bad press and popup-blocking software these have high click-through rates, but are held to irritate users. Not as widely used in SA as before, although popunder widely used by major US publications.
Controversial adverting format that takes up full browser window. Shows for a few second before or after you see an article. Used by some major US publications.
Uses layer technology to allow adverts to move over content to make them more eye-catching. Still being used, although held to have a high irritation factor.
Cursor adverts
Advertiser’s logo placed on mouse cursor when cursor moved on website. Cause of high irritation among users. Not widely used anymore.

Comments (2)

  1. Dave wrote::

    The consumer’s infinite varity of choices (to click-to or -from) is potentially the biggest opportunity/threat that online offers as opposed to traditional. As internet users becme more savvy, I think that online advertising has got to pull rather than push, users should WANT and appreciate the advertiser’s message online for it to be at all effective.
    Of course, contextual relevance and behavioural targetting will play a big role in this too.
    Is this practical?

    Friday, September 8, 2006 at 3:10 am #
  2. matt wrote::

    Hi dave,… you are completely right… i mean average click through rates are around 0,3% for banner campaigns. Even if they were 10 times that average, that’s still not good enough? Basically with online advertising — and actually with advertising as a whole — there is too much hit and miss and wastage for the advertiser — Google;s contextual search model is giving us an inkling of how advertising SHOULD work… ie be less hit and miss and more targeted… and that is why click through rates for contextual search models like Google is generally much higher.

    Online advertising of the future will be more targeted and less hit and miss thanks to searchability of the internet… advertising as it is now, is pretty rudimentary…

    It is practical, but the publisher’s audience would have to be big enough, or they would need to be part of a multi-site networked model (like Google adsense).

    Friday, September 8, 2006 at 3:43 am #

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