Advertising News

Canadian firms expand online
Despite a lagging economy, most Canadian companies expanded their Internet operations over the last year and are planning more growth online in the upcoming year. Oct 3, 2001

Online Marketing Gaining Steam
Optimistic IDC findings suggest that most U.S. companies are using online marketing in one form or another -- and more than half are looking to outsource. July 2, 2001

Confidence in Web, iTV Ads Tops Broadcast, Magazines
Media planners are more likely to make banner ad or enhanced TV buys than buys on most offline media, according to a new Myers Reports study. June 26, 2001

Canadian firms expand online

Companies fail to use Web access data wisely, survey says

Despite a lagging economy, most Canadian companies expanded their Internet operations over the last year and are planning more growth online in the upcoming year.

But few are using the Internet wisely, according to a survey by the Canadian Marketing Association.

The survey found that only 5 per cent of Canadian businesses are still abstaining from the Internet. Most have embraced the technology, with business-to-business Web sites - those that facilitate deals between companies - the most popular.

"Three-quarters of Canadian businesses have expanded their Web site presence in the past year. That's the good news,'' said John Gustavson, president and chief executive officer of the Canadian Marketing Association.

Only 3 per cent of companies in Canada said they scaled back their Web presence while 22 per cent said their online operations were unchanged.

The bad news is that Canadian corporations aren't using the Internet effectively. For example, they are ignoring customers' online access habits that could improve company marketing strategies.

"The most surprising thing to me was the number of companies not using the information that they actually have available to them from their Web site,'' Gustavson said.

The majority of Web sites were tracking page views, and the number of new visitors, but only one-third of businesses kept track of what percentage of visitors to retail sites, for example, buy something.

Less than 10 per cent track the number of people who select an item to buy but never complete the sale - the so-called shopping cart abandoners. A high percentage of cart abandoners could be a cue to the company to revamp their transaction software.

Statistics on the amount of money spent per customer and the time it takes to download Web pages were also being ignored by most online businesses, despite the fact that those numbers are easy to determine.

Similarly, more than two-thirds of businesses are creating a database of customer information but only half claim to be using their aggregate data.

"Having a Web presence alone is not enough for a marketing strategy,'' said co-chair of IBM Global Services Canada's interactive marketing and brand strategy practice. "We're really not using the Web and its capabilities.''

Internal politics over marketing priorities and funding for customer relationship management projects were the two most frequently cited reasons.

The most popular form of online marketing is outbound e-mail campaigns, often referred to as spam. Gustavson noted that members of the Canadian Marketing Association are supposed to refrain from sending e-mail advertisements, unless authorized by the recipient.

Banner advertisements and interstitial ads - those that appear between pages of content - were also popular.

Animation was also quite popular with small businesses, which the survey defined as those with fewer than 100 employees. Gustavson said that while animation can win over customers, users will only wait so long to get the facts. "One trend that's not limited to Internet marketing is customer patience,'' he said.

The survey included 452 companies over the past two months.

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Online Marketing Gaining Steam


It's true, at least according to research group International Data Corp. (IDC): most U.S. companies are using online marketing.

IDC interviewed executives at some 350 U.S. businesses about their current and planned use of Web marketing and found that most firms are actively planning or using some form of online marketing.

Despite the downturn in the industry's fortunes, 99 percent of the respondents -- which IDC said represents the spectrum of the U.S. economy -- said they currently conduct online marketing activities, are in the process of initiating them or intend to implement them within the next 12 months.

The reason? IDC's Liz Leonard, a senior analyst in the firm's E-Marketing Services research program, said the findings represent companies' faith in the Web's ability to reach broad audiences and to glean information about customers.

"Companies that have successfully leveraged the Internet medium for marketing activities stand to gain broader customer reach and insight through enhanced interaction than those companies neglecting Internet media, forcing all businesses to examine their online marketing strategies," Leonard said.

While the findings are optimistic -- and something of a shock in these difficult times for the online marketing industry -- Leonard warned that service providers' biggest challenge is seizing upon the opportunity to sell their services, not creating demand for Web marketing.

"Today, the question is not whether to embrace multichannel marketing," she said. "Rather, it's 'do we build, buy, or borrow online marketing expertise?'"

Fortunately for vendors, most of the respondents in IDC's survey said they currently favor the buying route, with 53 percent of the companies saying they would outsource some or all of their online marketing. However, interest in doing so varies significantly by industry and among clients.

For one, B2C companies are 14 percent more likely to spend money on online marketing campaigns than B2B firms, according to IDC. Additionally, the two sectors approach outsourced Web marketing differently: consumer-focused players look first for vendors with expertise marketing to specific user segments, while B2B businesses consider marketing technologies before target audiences.

"Companies have very different ideas about the types of online marketing services they want to outsource," Leonard said. "To compete successfully in this space, online marketing service providers will need to understand the differences and be able to recognize patterns ... before they can tap into this opportunity."

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Confidence in Web, iTV Ads Tops Broadcast, Magazines

Despite the bad press that it's received during the past year, online media might be held in higher regard among media buyers than previously thought -- even higher than broadcast television, according to a survey conducted by Myers Reports.

The New York-based marketing consultancy compiles a quarterly report of advertising confidence through surveys more than 150 of media buying executives. And this quarter, the firm's chief economist Jack Myers says his findings demonstrate high levels of support for online and interactive television relative to most other measured media.

To quantify media buyers' confidence in particular media, Myers uses what he calls an Ad Confidence Index, a weighted average derived from the percentage of executives who said they plan to either increase, decrease or maintain their overall media spending plans during the next year to 18 months.

The overall ACI for all media showed a slight increase from the previous quarter, which Myers interpreted as a sign that media buyers have stabilized their budgets, following a staggering 24 percent drop in the ACI between December 2000 and March 2001.

The new data, which breaks out the ACI by individual media, shows similar stabilization among online, direct marketing and interactive television. The data released today also shows these media to be significantly outperforming the media industry overall.

While the ACI for all media continues to hover around 49.40, iTV buys ranked a 52.13 on the Index. Online sponsorships, meanwhile, rated 60.82, while banner ads were 49.09 -- 2.4 percent better than in previous quarters.

Conversely, network broadcast TV rated only 39.25, while consumer magazines rated an ACI of 46.35. Indeed, most traditional media -- save direct and database marketing -- fell well below the average confidence level.

"Despite all the negative stories you see regarding Internet advertising ... their confidence numbers are uniformly higher than those of network broadcast television, consumer and trade magazines, national spot broadcast, national spot cable and network radio," said Myers, the firm's chief executive. "Like other media, interactive, direct and database marketing show some stabilization in confidence levels versus the shifts we saw earlier in the year ... however, these media are distinguished by the fact that their ACI numbers are consistently higher than those of most other media."

So, what does this mean? For one thing, the ACI has been a fair approximation of future advertising spending. In March, the Index had dropped 24 percent from its previous level, taken in January, preceding what has thus far played out as a trying upfront buying period for the major broadcast networks.

At about the same time, too, market analyst Henry Blodget cut his rankings for online ad industry revenue from flat to a 25 percent decline.

Now, Myers said he's seeing overall numbers that suggest a slightly increased likelihood of media buys in general. If everything holds, the latest ACI survey could be one of first indicators that the media recession may have bottomed out.

Better still: if the new rankings are indeed the start of an industry-wide stabilization, the news might also indicate that planners are holding online media in higher regard than before the media downturn -- and that's especially good news for the battered Web advertising players.

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