Online Advertising Measurement Standards Must Improve, Finds Ipro Survey

Ipro conducted the survey across online and offline advertisers in order to ascertain where internet advertising’s biggest failings are. Advertisers on the whole find the Net to be a less effective medium than offline media, but nevertheless see promise in its capabilities.

Demographics and measurement The lack that advertisers are feeling with web advertising, is that measurement standards (despite all the promise of electronic tracking and accountability) are still too poor to give the medium the accuracy it requires.

Nevertheless, panel-based Net measurement was rated more accurate by US advertisers than radio, less accurate than print and occupying a middle ground somewhere with television.

Demographically, the web should provide advertisers and marketers the ability to very specifically target the group of people they are trying to reach – or at least offer information on the group of people they actually did reach. However, advertisers have yet to find “the key to opening the demographic door, due in large part to the needs in the area of measurement,” says the Ipro report.

Online advertising is not disappearing Ipro says that it is a myth that online advertising is retracting. “After a peak in 2000, online ad spending settled somewhat in 2001. According to Competitive Research Reporting, this drop, of 7.8% [in US spend], compares favourably to the declines seen by Spot TV (14.7%), National Spot Radio (22.4%) and Sunday Newspapers (10.4%).”

PricewaterhouseCoopers notes that the $4.6 billion in online ad spending in its fifth year (1999) exceeds that of television’s $3.7 billion in its corresponding fifth year after adjusting for inflation.

What do advertisers think? Of the 145 advertisers and agencies that responded to Ipro’s survey, 75% said that they use the internet in their campaigns.

Through which channels do you advertise?
	Number	Percentage
Internet	109	75
Print	127	88
Radio	85	59
Television	82	57
Source: Ipro, January 2002

Only 25% of these respondents consider the medium to be very or extremely effective. This result compares with 51% for print, 44% for radio and 75% for television. Regarding effectiveness, the Web has a long way to go, at least in perception, says Ipro.

How effective do you consider online advertising in reaching you target audience?
	Number	Percentage
Not at all	5	5
Somewhat	33	31
Moderately	41	39
Very	22	21
Extremely	4	4
Source: Ipro, January 2002

What could improve online advertising? Essentially, better measurement standards are required by advertisers if they are to take to the Net in a bigger and more enthusiastic way. When asked what would improve the use of online ads, advertisers gave the following responses.

What will it take to make online advertising more effective?
	Number	Percentage
Improved advertising formats	52	48
More reliable targeting	69	63
Lower costs	29	27
Greater trust in info provided from sites to advertisers	48	44
Greater internet traffic	12	11
Measurement standards	78	72
Source: Ipro, January 2002

Advantages do not yet outweigh drawbacks “Given that internet advertising makes up only a small fraction of all advertising, its advantages do not yet outweigh its drawbacks,” concludes the report.

Advertisers do not trust the media pack statistics that websites provide and the majority think that a third party validation is necessary.

Conclusion “Overall, online advertising remains strong. Revenues in 2001 will almost certainly top those of 1999, and will trail 2000 by less than 10%.

Moreover, the 2001 drop-off will be significantly less than the drop-off for the other media. Advertisers value online advertising for its ability to be measured, its speed to implement, and its flexibility to be tailored to specific content vehicles. To convince advertisers of its worth, however, online advertising needs to be considered effective as calculated by ROI,” concludes the report.