Will Recession Change Online Advertising?

By Smrithi Khanna

Everyone’s searching for accountability and measurability across media to ensure their ad expenditure is giving results

Will the death knell sound for digital advertising as we know it? It’s ironic that even as digital is touted as a saviour in these stretched times, banner ads are increasingly coming under the scanner.

Some digital media specialists say the old formats of online display ads are too bland and easy to ignore, and will be expunged during economic crisis giving way to more rich media—interactive multimedia—and larger-format ads.

Everyone’s searching for accountability and measurability across media to ensure their ad expenditure is giving results. Digital advertising solutions provider Eyeblaster Inc.’s India and GCC (six Gulf Cooperation Council countries) managing director Raghu Seelamsetty says there is already a move towards more rich media advertising, and as bandwidth improves, we will see an increase in video ads. His reasoning: Rich media is more effective than standard banners because of its inherent ability to measure interactions—much more than just a click-through ad. You can measure every interaction and the real time of engagement with the rich media ad. For example, in video ads, you can know exactly how many people saw the video and which part of it, since people do not step out to the kitchen in the middle of an Internet video ad (unlike television ads).

Measurability combined with the deep analytics which rich media provides will act as a catalyst for advertisers to move online.

Rich media may also address the issue that site publishers and brand advertising may actually be working at cross purposes. Observes Seelamsetty: “The most effective direct response campaigns tend to come from media occasions in which consumers are less engaged. This is because they are more willing to take time out to respond when they are less involved in the media interaction.”

In the context of online, publishers are shifting their focus to providing engaging content to keep the viewer on the page for a longer time rather than generating as many impressions as possible. People are far less likely to click on a banner ad when they are immersed in the content of a site than when they are merely browsing through a site to pass the time. Therefore, the ability rich media provides to interact with the ad without leaving the page is crucial.

Some digital specialists at ad agencies, however, underline that most of the poor banner ad outcomes are a result of bad planning. Prasanth Mohanachandran, executive director, digital services, OgilvyOne Worldwide, India, points out how simple reach-frequency metrics and creative rotation principles are not employed for most campaigns. His point: The banner is not dead. Bad creative is.

This is true of every medium, especially in times such as these when advertising is largely driven by return on investment. The simple banner still provides the highest opportunity to see among all variants and, with a good call-to-action it still provides excellent results on a cost-per-click or a cost-per-engagement basis in India.

Improved infrastructure and technology allow advertisers today, to use richer formats in those conventional flat banner spaces—but rich media too, delivers only with good creative backing, says Mohanachandran. He predicts newer formats such as interactive video coming into play sooner and contextual advertising witnessing exponential growth next year.

If banner ads don’t change format, advertisers could move some of their display ad budgets to online ad networks and direct marketing. Says Roy de Souza, founder and chief executive of global ad serving network Zedo Inc.: “Some advertisers who are watching their budgets are starting to really ask if brand advertising on the Internet is working. Brand advertisers are asking this, not direct marketers. And it will definitely affect India, too.”

He points out how direct marketers such as Makemytrip.com can track exactly how many ads they have to buy to sell a ticket. They can use the ad server to track how many people saw the ad, how many people clicked on the ad and went to the website and booked a ticket on it.

In contrast, it is more difficult to track the success of brand advertising. An ad server such as Zedo has no way of recording whether a person who walked into a shop chose Samsung because he saw a lot of Samsung ads on the Internet.
So, what’s next for display? Roy predicts bigger ad formats gaining ground for brand advertisers. For example, ads on top of the page that cover up what the reader is reading until the user closes the ad. These ads are big and visible and brand advertisers like them.

Also, formats which are visible for longer will gain ground. Usually, as a user scrolls down the page the ad will be left at the top and the user will no longer see it. By making the ad scroll down the page as the user scrolls down the page, the ad will be visible longer.