Most experienced web surfers will tell you that the most annoying aspects of life on the internet are pop-up ads and spam.
Sure, some think that publishers who demand registration for news are a pain in the digits, or that sites which don't accept alternative browsers are sacrilegious. And of course, the unrelenting stream of porn and other nasties is a major turnoff. Still, they don't come close to making people's blood boil like junk e-mail and "pops" do.
That being the case, you might think they couldn't possibly work. But if you did, you'd be wrong. On the contrary, they are enormously successful.
Quite a surprise, since here I was believing that spam existed merely to give my fingers an aerobic workout from pounding the Delete key. As for pop-ups, I thought their primary function was to entice me to switch to Mozilla, a browser that suppresses them, or to download pop-up ad-buster software.
But in the online marketing game, I learned there are a number of popular misconceptions floating around.
Myth: Spam can't possibly work because no one is stupid enough to fall for come-ons for penile enhancements, lower mortgage rates and Nigerian scams.
Fact: If only that were true. "Spam does work, but in a relatively artless way," said David Schwartz, a director of sales at Claria, an online behavioral marketing firm. Since there is almost no cost associated with sending out millions of e-mails (unlike, say, with mail-order catalogs that require hefty postage), spammers require a miniscule click-through percentage.
In the mail-order business, you're lucky if 2 percent of the people who receive your catalog actually buy something. But if a bulk e-mailer sends out 1 million messages for a product that he sells for $20, he only needs 0.1 percent to purchase it to earn $20,000. Multiply that by the number of bulk e-mailers and it's no wonder a study by the Direct Marketing Association found that consumers spent $32 billion on products and services advertised in e-mail in 2003.
Of course, the downside, as reported in Brian S. McWilliams' upcoming book, Spam Kings: The Real Story Behind the High-Rolling Hucksters Pushing Porn, Pills, and %*@)# Enlargements (O'Reilly), is:
- More than 60 percent of all e-mail in the first half of 2004 was spam, while three years ago it comprised just 8 percent of all message traffic. (Source: Brightmail)
- AOL blocks more than 1 billion spam messages a day.
- Junk mail costs society $10 billion in lost productivity and filtering software. (Source: Ferris Research)
The solution? Well, there really isn't one, other than turning up your spam filters and hoping that antispammers and ISPs can force the more egregious offenders off the net. Unless, of course, you'd like the government to charge for e-mail. That would drive most spammers out of business, but ruin the internet for the rest of us.
Myth: Since people go dyspeptic over ubiquitous, in-your-face marketing techniques like pop-up ads, they either tune them out or close them down without even seeing the product or service advertised.
Fact: Despite popular perception, pop-up ads are among the best performing of all online ads. If I told you not to think about Bill O'Reilly's underwear, your first thought would be to imagine O'Reilly's boxers, briefs or I shudder to think what else (perhaps emblazoned with the Fox News "We report. You decide" slogan.) That's how "pops" work. You are aware that you are ignoring them, so they cut through the clutter.
Michael Bailey, interactive media supervisor at GSD&M Advertising of Austin, Texas, said, "'Pop-ups generate roughly 5 to 10 times the response rate of standard banner units" because "people are more apt to notice them."
Bailey attributes the success rate partially to "the annoyance factor." He points out that if they didn't work advertisers wouldn't use them.
"Mass pop-unders are sold typically on a pay-per-click or user-action basis," he said. "If users don't click and convert, these sellers go out of business or find another means to make money."
This doesn't mean that most people like them. A study conducted by Dynamic Logic found that almost 70 percent of those surveyed had a "very negative" opinion of pop-under ads and almost 80 percent held similar views on pop-up ads that launch a smaller browser window.
Myth: When you visit a website, the publisher of that site has the exclusive right to present information -- like advertising, content, etc. -- to the visitor without interference.
Fact: It depends -- and you can expect legal battles over this for years to come. The Online Publishers Association believes that website owners have the exclusive right to display ads and content. So if you visit The New York Times' website, the Times determines what content you see.
But Claria, which views itself as a software publisher, takes a very different view. It believes that you, the user, own your own computer and therefore your own desktop. This is an important distinction because Claria, formerly Gator, makes money by giving away software to 40 million users who agree to allow the company to target ads at them based on their anonymous surfing habits.
Schwartz likens Claria's ads to a meeting reminder in Microsoft Outlook.
"Each has the potential to obscure the view of a website at a specific time with information that is relevant at that time," he said. "That information might be that your meetings will start in 15 minutes or it might be that you can save a lot of money on an airline ticket."
Myth: There just isn't a lot of money to be made in online advertising, especially if you aren't Yahoo, Google or MSN.
Fact: Not only does Jupiter Research expect net ad revenue to hit $8.4 billion this year, it may soon outstrip ad spending in print magazines.
When it does, you'll know internet advertising has truly arrived -- even if it annoys the hell out of you.
Adam L. Penenberg, Wired News. September 8, 2004.
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