Analysis: Interruptive ads lose their appeal

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Revolution

01/05/2007

The latest census survey from the Association of Online Publishers (AOP) reveals that interruptive advertising formats, such as rich-media overlays and pop-ups, contribute very little to overall advertising income.

Banners and buttons are still the most important format in terms of revenue generation (45 per cent of total average), followed by Skyscrapers (21 per cent) and MPUs (15 per cent). Meanwhile, rich media overlays make up 6 per cent of revenue and pop-ups a mere 2 per cent. This was reflected in March's IAB online ad spend study, which revealed that interruptive formats were the only digital category where spend dropped from 2005 to 2006.

Given these findings, is it safe to assume that we're finally witnessing the demise of the pop-up? If so, why, and where should online advertising budget now be channelled?

Martin Pavey, product development director at Tangozebra, advises clients to engage rather than invade - creative and placement matter more than technology. "With the web fast becoming an entertainment channel after establishing itself as the number one information source, it's important the advertising fits in smoothly for both advertisers and users," he says. "You wouldn't expect an ad to cover up a TV programme and the same is true of the web.

"The reality is we always knew that ads covering content without the user asking for it needed the utmost care in design and, most importantly, placement. The problem is they became a victim of their own success; astounding click-through rates on overlays for example saw a plethora of poorly executed overlay format campaigns and, guess what, they pissed users off. But publishers listened and took a much closer interest in what kind of rich-media formats suited their users."

Conde Naste Interactive doesn't run interruptive rich-media formats on any of its 12 site home pages, which receive high volumes of traffic, arguing that they compromise user experience.

Higher volume

Serena Privett, commercial director for Conde Nast Interactive and AOP board member, says: "When proposing campaigns we still recommend a higher proportion of the budget be spent on more traditional formats, as you get a higher volume of impressions for your budget than more expensive rich-media formats, and from an advertising operations perspective they are easier to set-up and ensure even delivery.

"As standard creatives 'frame' content rather than 'interrupt' content, the user experience is better.

"In our experience many luxury clients, such as Gucci and Tiffany & Co, prefer to use standard formats as they have concerns that interruptive formats have a negative impact on their brand. However, clients such as BMW, which embraced online advertising from the outset, are incredibly creative with rich media and have proved the positive impact of more creative formats when in the right context and for the right brands."

Tom Dunn of i-level believes that balancing relevancy of content against advertising is vital to the media planner's role. He adds that increased broadband penetration has significantly changed the way that people use the internet.

"People are increasingly going online to watch content. This presents an opportunity for brands to become the content. If people are looking for engaging content, why not step in and make it yourself?"

He cites i-level's work for The Royal Navy, creating profile pages on social networking site Bebo as part of an integrated recruitment campaign. Pilots, engineers and medical officers from the TV ads talked about their jobs, while visitors could download wallpapers, video clips and games.

The interactivity seems to be well received by Bebo users, who are adding the Navy staff to their friends and posting comments.

This kind of content reflects the new ways in which people use the internet as broadband penetration increases. People are now spending more time watching video content, which again opens up huge opportunities to advertisers.

Errol Baran, head of new media advertising at Channel 4 and chairman of AOP commercial group, is not surprised at the census results. "There has been a significant downturn in interruptive formats. Broadband penetration continues to increase and the advertising market reflects that change in technology.

"So much of the Channel4.com experience is visual and video-based, therefore you need a broadband connection to view. Part of our strategy is to increase short-form video, not only across the dotcom business but in the recent launch of 4OD. In a couple of years, the market's all going to be video-based," he predicts.

Premium brands

"This is indicative in IAB estimations on traffic. Unfortunately there's no line on video advertising, because ultimately it's absorbed into the rich-media category. Next year we should look at the impact of video advertising."

Andrew Wilding, European MD of Vividas, a full-screen video streaming provider, has noticed growing enquiries from premium brands wanting to enrich interactivity. Its online viral trailers for Paramount's Transformers is a key example of applying true cinematic experience to video marketing.

This medium may work for major studios, but what of other brands? Wilding believes that, as the competition to grab people's attention soars, companies will be unable to afford not to use online video ads.

But Baran does not think this is the end for all traditional online advertising formats.

"A large proportion of advertising will still be made of banners and Skyscrapers, the pillars upon which online advertising is built. The best thing about internet is that it's comparable with different traditional media. Banners and Skyscrapers are poster format ads, while video is the online sister of TV commercials."

But, not all agree that interruptive formats are, necessarily, dead. "They are dead as an advertising format," claims Lazar Dzamic, head of planning at Underwired. "Rich media produces the best results, then MPUs, then Skyscrapers," he adds. "At the bottom is the traditional banner."

He predicts a demise in traditional online display ads as search, especially PPC, is growing. "PPC has been the fastest growing online format for several quarters now, and is where a lot of money will shift, while display formats are all in decline.

"Banners and buttons are still the most important in terms of revenue generation, but there's a lot of bad online advertising out there. Cutting-edge online advertising is mostly rich-media, interruptive formats, but it's cost effective."

Dzamic sees non-display advertising increasing as new ways to treat PPC develop. He also sees rich media growing within display, for example dynamic video within banners, depending on ad-serving technology.

"User participation will creep into traditional rich media and display ads, such as pre-roll ads that can activate a much bigger animation of the page."

The concept of ads offering more user choice is popular with Suzannah Gray, advertising manger at BMW. "We tend to use expandable formats as an alternative because we don't like to engage in highly interruptive formats. You want to be able to offer rich engaging creative and expandable formats allow people to choose," she explains.

James Kirkham, director of agency Holler, thinks that while spend on banner ads will continue, traditional display formats are on the wane. "Banners and buttons are incredibly outdated media to advertise in. The decline in rich-media formats is part of an overall trend to move away from anything interruptive. We aim to create brand advocates by not getting in people's faces. In fact, we do the opposite by trying to enhance user experience."

Show experience

Engaging users through a choice of media, and creatively, was key to Holler's work for the launch of E4 show, Skins. The campaign demonstrated a move away from interruptive ads, towards fully interactive and involving marketing.

Kirkham explains: "Instead of trying to interrupt what our audience are interested in, we wanted to become what they were interested in. Our ambition was to blur the distinction between the show and how it was marketed. Approaching everything as an opportunity to extend the show experience by investing in interesting ways for fans to meet and get to know the characters before a single episode had aired.

"We wanted to involve the audience, invite their opinion and creativity and give them the tools to spread their enthusiasm. Everything was produced in formats natural to the audience, giving them full control over the content whether they wanted to post it on video communities, their MySpace pages, or email it to friends."

Marcus Hadfield, head of digital at Meteorite, agrees that users are demanding more creativity and less interruption. "It's no surprise that spend on pop-ups is falling off the cliff. Not only is technology conspiring to make them virtually redundant (who hasn't got a pop-up blocker?) but a reliance on interruption is an old way of getting people's attention. The same goes for overlays.

"Is there a future?" he asks. "Not for plain old pop-ups. If overlays can find a way of 'polite-loading' and media owners can be disciplined enough to demand highly creative ads, then they have a limited future as a good brand-building tool.

"However, as more traditional banners and MPUs are delivered with real interactivity and as near saturation of broadband approaches to support them, old

 

Tom-Dunn