Study: Broadband ads more effective than narrowband

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Research to be released today by @Home Network shows that broadband advertising is more effective than narrowband advertising, reinforcing the argument that advertisers should use more rich media in their online campaigns.

However, until ad serving becomes easier, more consumers get broadband access and advertisers figure out how to deliver the most impactful campaigns, rich media probably will continue to be underutilized, say marketers and industry watchers.


"We as advertisers need to do a better job in terms of optimizing it," says Jay Thomas, director of digital media for Levi Strauss & Co., one of seven advertisers participating in the @Home research study late last year.

The other advertisers were AT&T Corp., Bank of America, First USA, Intel Corp., Johnson & Johnson and Toys "R" Us. Intel funded the research to demonstrate the performance of its Pentium II chip.

The study, based on online surveys with 3,000 respondents, was conducted by Ipsos-ASI Market Research over @Home's high-speed Internet service. The service reaches about 330,000 subscriber homes.

Users, recruited online using intercept polling, were shown one of four test rich-media ads for each advertiser.

One piece was a narrowband control ad; the other three were broadband, meaning optimized for high-speed delivery (typically T-1 speed or greater).


The ads were created in-house by @Home with help from four agencies: Modem Media, New York, for AT&T; USWeb/CKS, Cupertino, Calif., for Levi Strauss' Docker's brand; Frog Design, San Francisco, for Bank of America; and Medical Broadcast Co., Philadelphia, for Johnson & Johnson's Tylenol ads.

Here are topline results:

* Ad recall for broadband advertising was 34% higher than narrowband advertising.

* Broadband advertising was at least 30% more effective than narrowband advertising, based on questions concerning how the ads shifted a user's understanding of the brand.

* In 60% of cases, over half of the visitors spent between 30 seconds and five minutes interacting with the ads.

* Broadband offers a lower cost-per-branding impression than narrowband as a result of higher recall rates.


This last point is a rather controversial approach to defining a new formula for online advertising: Impression pricing based on a cost-per-branding metric.

"We're putting a stake in the sand here," says Susan Bratton, director of online advertising for @Home.

"We and our clients understand the world is not measured in click-through," says Ms. Bratton, adding that @Home, working with its advertisers, will try to quantify the branding effectiveness of online campaigns and assign a value to be considered, along with click-through and cost-per-impression, in the price of the overall ad package.

However, Drew Ianni, analyst, online advertising, at Jupiter Communications, says: "It would be a fairly difficult pricing model to justify at this early stage of the Web and broadband.

"The only way you could justify doing it is to have very detailed, Broadband more effective in-depth post-buy analysis of whether the needle has moved [for purchase intent, recall or other variables judging ad effectiveness]," he notes.


Still, Mr. Ianni says the overall results are positive.

"I think it bodes well for rich media. It's clearly an advantage to have that in your corner," he says.

Mr. Thomas says Levi was pleased with the results, while noting the need to do more to understand how to use rich media to achieve maximum results.

The average recall rate for the Dockers broadband ads was 54%, compared with 47% for the narrowband ad. And 86% of users spent up to three minutes interacting with the Dockers ads.

"I think these results show a lot of promise," says Mr. Thomas.

However, he adds, "Ad serving is a big challenge. There is no one I know of, no third-party ad servers, able to deliver [rich media].

He cites technical reasons, a myriad of ways to serve rich-media ads and resistance to such ads from sites.

Another challenge is advertiser inability to make the best use of the medium.

"We are still working more off of static advertising and enhancing it, instead of starting with a dynamic message and building it to be optimized in this environment," Mr. Thomas says.

Specifically, he says Levi Strauss wants to use rich media with its electronic commerce efforts to "bring the storefront closer to the user."

Mr. Thomas says he wants to create more contextual, timely and rapidly changing messages in online ads to sell merchandise online.

But just how much interactivity to put into ads, including transactional capabilities, is a key question for advertisers.

Should they use rich media to deliver full functionality in ads, or just enough to get users to click through to the advertisers' sites?

That is the question @Home is hoping to answer with Rich Media II, the next phase of its research launching today.

Participating advertisers include Ford Motor Co., IBM Corp., Toyota Motor Sales USA's Lexus, Pfizer, Procter & Gamble Co. for Scope and Cover Girl, and Showtime.


The research, to be conducted by Ipsos-ASI, will look at which ad models make sense for different types of advertisers and products.

"Where should you put your dough?" says Ms. Bratton. "Is [P&G's] Tide the appropriate product for a pop-up window or should you go to the site?"

Results from the next phase of research are expected this summer.

Copyright March 1999, Crain Communications Inc.

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