
Although some techies may find it hard to believe, you do have to consider
some disadvantages to online advertising, including the following:
It’s too measurable. You can gather more statistics than a baseball
team. Worse, some of the click-through rates (the number of times people
click on the ad divided by the total number of times people see an ad)
are low — often 1 or 2 percent or even less. That means hardly anyone
who sees your ad clicks on it and visits your Web site — or buys your
product. Online advertising is still in its infancy.
A few years ago, advertisers believed that increasing the number of
people who saw an ad would increase the likelihood of a sale. The think-
ing was that thousands of eyeballs looking at an ad would translate into
hundreds of sales. Not necessarily so. A bit later, everyone decided that
increasing your click-through rate would increase the number of sales.
But that wasn’t entirely true either. Currently, advertisers think that the
only real measurement of an ad’s success is to count the number of
people who actually buy a product. The point is that because people
don’t really understand what works yet, they collect every possible sta-
tistic. But not all statistics are useful. As of this writing, nobody knows
for certain which statistics will prove to be the most valuable.
Some major ad agencies (and Wall Street) are losing confidence in
online advertising. The Internet is still so new that the advertising
world simply doesn’t know yet which advertising methods work best.
You do have, however, some good news. Few deny that in the future
some form of Internet ads (perhaps combined with TV) will be both
powerful and effective. People are figuring it out fast.
Customers are experiencing advertising overload. One problem with
online ads is the incredible amount of clutter on most Web pages. Every
advertiser wants consumer attention, but readers simply have too much
information to digest. Often, they choose to ignore ads — and that is
what leads to low rates of return.
Even with its disadvantages, the Internet is turning into a tool that surpasses
the wildest dreams of ad execs. The radio took 38 years to reach 50 million
users. Television took 13 years to reach 50 million viewers. And the Internet
took just 5 years to reach the same number of users — a stupendous
achievement.
The Internet is a social technology. As your site grows, you can offer chat
rooms and e-mail newsletters (not to mention a plethora of other options).
Electronic groups are effective and fun as well. People like a sense of commu-
nity, and the Internet offers that. In the end, all that interactivity means that
you can sell people what they want and not just what is left over in stock.
That’s not just good — it’s right. Happy, engaged customers are the Heisman
Trophy of the advertising world.
75
Chapter 6: Online Advertising
11_045833 ch06.qxp 11/22/06 3:51 PM Page 75