Nabisco linking Web ad rates to sales results

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Nabisco Direct has convinced a number of World Wide Web sites, including the Excite search engine, Comedy Central and MovieLink, to accept advertising with ad rates based on sales results.

Nabisco Direct will be advertising four products on the sites: Oreo and Mr. Peanut cookie jars, a holiday gift basket and chocolate covered Oreos. The more than one dozen sites taking the ads will receive a percentage of revenues that Nabisco gets from users who respond and buy the products.

While various Nabisco divisions have Web sites, this is the first time Nabisco Direct will be advertising on media sites.

Most companies with Web sites have resisted selling ads on any other basis than cost-per-thousand page views. Procter & Gamble Co. sparked controversy earlier this year when it wanted to pay for ads based on the number of users who clicked on them (AA, April 22).


But Andrew Pakula, president of ORB Communications & Marketing, the company that brokered Nabisco's deal, is convinced advertisers need accountability from an interactive medium such as the Web, which he finds "much more similar to a direct-marketing model than a brand-awareness model."

Nabisco Direct has a site itself, but President Dennis Oleck said with the banner ads "we expect to expand our market and generate increased sales," calling the Web "the shopping mall of the future."

Neither Nabisco, ORB nor any of the sites would reveal the split between the package-goods giant and the Web sites, but in general a direct-marketing model should give the sites between 5% and 30% of sales.


Despite the enthusiasm of Messrs. Oleck and Pakula, executives at some of the sites taking the Nabisco ads are more cautious.

"For us it's a test," said Joe Gagliardi, director of advertising at Entertainment Drive, which provides show business content written from the fans' viewpoint. "To be frank with you, we're not sure if it's the right thing to do, but we want to stay light on our toes and experiment."

Another site, the Gist, which bills itself as the largest independent TV site on the Web, is also taking the Nabisco ads with a combination of curiosity and trepidation, according to Gist CEO Jonathan Greenberg.


"First, Nabisco is a blue-chip advertiser. Second, the timing is right," Mr. Greenberg said. And by running the ads during the holiday season, "we can see how the transactional model plays out."

That said, Mr. Greenberg is hedging his bets by only devoting 10% of the Gist's ads to the plan. "Ninety percent of our ads are still the traditional CPM model."

Other sites taking the Nabisco ads include Freeloader, Audionet, GeoCities and WhoWhere.

Copyright November 1996, Crain Communications Inc.

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