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Forbes.com offers brand guarantee

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An ambitious ad program unveiled last month by Forbes.com—guaranteeing online advertisers an increase in branding effectiveness or their money back—was hailed by industry players and may signify the beginning of a trend.

The Forbes.com program, called the Brand Increase Guarantee, offers advertisers spending $100,000 or more a money-back guarantee if their online ad campaign doesn’t produce a statistically significant increase in one of four brand metrics after 60 days. The four metrics are brand awareness, brand favorability, message association and purchase intent.

"We are living in a time and place where the Web is the most trackable medium, but the Web is taking it on the chin," said Jim Spanfeller, president-CEO of Forbes.com.

Throwing down the gauntlet

He said critics of online advertising point to its low click-through rates, often below 1%, but cannot accurately measure the performance of offline media campaigns in such media as print or television.

"If you are looking for ROI [return on investment], we will guarantee the fact that you will get an increase," Spanfeller said.

Campaign performance will be measured by independent research company Dynamic Logic Inc., using its AdIndex Brand Metrics Research. Dynamic Logic will issue a written report to advertisers following their campaigns. If marketers don’t see a significant increase, Forbes.com will refund their money.

"I think Forbes has thrown down the gauntlet to every advertiser and agency out there," said Greg Stuart, CEO of the Interactive Advertising Bureau.

Stuart said he wasn’t aware of other online publishers that had announced similar programs, but added he would be surprised if others didn’t follow Forbes’ lead. "It’s a no-lose proposition," Stuart said, pointing to studies of more than 1,000 individual brands using online advertising, with 80% of campaigns showing positive results. Stuart said that when the creative was changed on the remaining 20%, all but one campaign had positive results.

Rudy Grahn, senior analyst at Jupiter Research, said guaranteed performance already exists to a certain extent on the Internet.

"Any advertiser that is really looking for a performance guarantee pretty much already has it if they know how to renegotiate a buy," Grahn said. He noted that online advertisers could take the performance metrics on a campaign and renegotiate deals if the campaign fails to perform satisfactorily.

"What Forbes is trying to do is explain in the simplest terms possible that online advertising works if you set realistic goals for the campaign and optimize results as you go," Grahn said.

While Forbes’ existing advertisers probably realize this already, "It may help them bring in new advertisers to the Internet," he said.

At least one other online publisher, Weather.com, has been offering money-back guarantees to advertisers on an individual basis.

Paul Iaffaldano, chief revenue officer at Weather.com, said the publisher doesn’t have a formal guarantee program, but it offers branding studies in conjunction with Dynamic Logic and its own measurement system.

Iaffaldano said that in the past year he has made several offers to advertisers to refund their money if the branding studies didn’t yield "resoundingly successful" results, but so far no one has taken him up on it.

Weather.com is also working on a new ad program that would guarantee reach and frequency of online ad campaigns to advertisers, but it has not implemented it yet.

Guarantee applauded

Other online publishers applauded Forbes.com for offering the money-back guarantee.

"I think it’s brilliant," said Scot McLernon, exec VP-sales and marketing at CBSMarketWatch.com, which is an innovator in online ad packages, such as those that offer space by day-parts.

"I’d like to have gotten right behind them and been a me-too," McLernon said.

However, practical issues such as accounting practices prevent CBSMarketWatch from offering advertisers a money-back guarantee. McLernon said it would be difficult to record revenue that was booked during one quarter if advertisers were given a 60-day period in which they might be given their money back.

"I think they have almost a sure bet," McLernon said of the Forbes plan.

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