Billboard Advertising Goes Digital

Imagine yourself able to buy some high tech billboard advertising in your city, billboards so high tech they tell you not only how many people saw the billboard (the number of impressions) but also how many of those people who immediately drove to your store or company's office. Better yet, what if you could even get a report telling you exactly how many customers you got, and how much money each one spent with your company over the next year.

The reality is that, of all the priceless information detailed above, outdoor advertising actually provides only information about impressions. The digital billboards I'm talking about do exist, but we call them banners, and they appear on Websites.

When the Internet truly went public in the mid-1990s, nobody really knew whether banner advertising would pay off. The lure of banner ads, however, was undeniable. For once, advertising results could be measured in tremendous detail and almost in real time. Partly as a result, billions got spent on banner advertising, and billions more got invested in dot com companies whose very existence, in the end, would depend on banner advertising sales revenue. Meanwhile, countless small and medium-sized businesses sat on the sidelines and just wondered whether banner advertising would actually pay off.

So, do banner ads offer great value? Maybe. First, it's helpful to learn some jargon. Website traffic reports count impressions -- the number of times when a banner appears on a person's computer -- more accurately than any Nielsen survey ever devised. For media experts, however, the next level up is more exciting - "click-throughs." That is, the number of people who actually clicked on a banner ad and went somewhere. More than that, with the use of cookies -- little id tags that jump from the banner to your browser -- sophisticated banner advertisers even track exactly which banner ad you clicked on (and which site it was on). A sophisticated advertiser, Nextcard, tracks whether you then sign up for a Nextcard credit card, and - this is a biggie - if you do open an account, whether you transferred a balance to your Nextcard account.

Nextcard's technology is cutting-edge and proprietary, but firms like DoubleClick can also provide impressive details about banner advertising ROI. The level of detail is so great that some advertisers have negotiated a pay-for-performance model for banner advertising, a model advertisers can't get from traditional mediums.

At the same time, however, consumers seem to have become better and better at ignoring those pesky banners on their monitors. The Wall Street Journal, in an April 23, 2001, special section, reported that "an estimated 0.5% of consumers will click on an ad placed in front of them, down from an already-slim 2% to 3% in the mid-1990's." So what's a small business to do?

The best advice might be to exhaust other marketing vehicle options first, and then try banner advertising. According to The Wall Street Journal the median rate for banner advertising is $25 per 1,000 viewers (impressions). In advertising, the CPM (cost per thousand impressions) is a key way to measure ROI. If you get the 0.5% average for click-throughs, that means $100 spent wisely would buy you 20 visitors to your Website; $1,000 would buy you 200 visitors.

In considering banner advertising, ask lots of questions. Can you reach your target market? If so, what is the CPM? How does this rate compare to other forms of marketing/advertising to reach prospects? Can you negotiate a rate based on click-throughs? What are new visitors to your Website worth? What do you want site visitors to do once they arrive, and what percentage act as planned? Do you get a new customer 0.1% of the time? If you do, then how much will you need to spend to get a customer? Do you just want name recognition/brand awareness? Because more information is available, buying a banner ad is probably more complex than buying a billboard. Either way, you'll want to make the right choice, so every dollar counts.

This article first appeared as a column written by Dave Tedlock, NetOutcomes' president, for Inside Tucson Business and/or the New Mexico Business Weekly.

Click HERE to return to Articles page

Top | Home