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Wednesday July 12 07:59 PM EDT
Online Advertising Speaks Out
Online Advertising Speaks Out
(The Industry Standard) Everyone agrees that banners are ineffective, yet they still account for more than half of all online ad spending. Why? Online advertisers have few alternatives. But a handful of ad companies are trying to change that by offering audio. The new ads usually take one of two forms, either as jazzed-up banner ads or as streaming-audio snippets in online radio broadcasts. TheDial, a company that licenses co-branded Internet radio broadcasts to 30 media sites, including Salon.com and Women.com, is experimenting with audio ads on its network. The ads, which last for 15 seconds and point listeners to a link to the advertiser's site, are working, according to TheDial CEO Todd Herman. He says that Internet telephony company PhoneFree.com's spot has drawn a 25 percent click-through rate, while baby boomer site MyPrimeTime's ad got a 19 percent response. But those numbers don't tell the whole story. Bill Kemp, director of brand communication at New York-based PhoneFree, acknowledges that the click-through rate for his audio ad dropped over six weeks to the industry average - a pathetic 0.4 percent. And the initially high response rate might have reflected PhoneFree's introductory offer of free long-distance for cellular-phone service. Nonetheless, the potentially high impact of audio advertising - even if it doesn't last - holds an undeniable appeal for advertisers. According to a recent survey of ad agency executives by the media research firm Arbitron, more than half of media buyers say they would like to try audio advertising this year. Some already have. Compare.net and Deja.com both bought audio-video banners on the Internet media company RealNetworks' sites. And advertisers such as 800.com, Ashford.com and Hewlett-Packard have used in-stream advertising, 15-second ads that play on RealNetworks' radio channels, where response rates reach 3 to 5 percent. Other Internet radio broadcasters such as BroadcastAmerica, ClickRadio and RadioWave are posting audio ads, as well. There are obstacles, however. Many Web sites won't accept streaming-media ads. Avenue A, an agency that places ads on 2,500 sites, says fewer than 5 percent of site publishers take audio advertising. Thus, mute banners might be lifeless, but they're not about to disappear. "Advertisers remain loyal to the banner," says Shelly Morrison, RealNetworks' VP of sales. "It's still the hardest-working ad unit."
Listen to This Half a dozen Web media companies are experimenting with audio ads. | COMPANY | FUNDING | DESCRIPTION | BroadcastAmerica
Portland, Maine | Dick Clark's United Stations Radio Network reportedly invested "millions" for a 10 percent stake. | Broadcast! Am! erica streams news for 545 radio stations and 67 local TV stations. It plans to replace local ads with national ads for Net broadcasts. | ClickRadio
New York | $8 million from iHatch.com, Sierra Ventures and Telesoft. | This personal Internet jukebox will embed five minutes of advertising for every hour of music. | Hiwire
Los Angeles | $18 million from New Enterprise Associates and Grey Advertising. | The streaming-media company helps local radio broadcasters tar! ge! t ads to Net listeners who live outside the listening area. | Lightningcast
Alexandria, Va. | $4.7 million from Redleaf Group and Birchmere Ventures. | Lightningcast provides ad-insertion technology to CyberRadio2000.com, DiscJockey.com, eRadioLive and 2000Radio.com. | RadioWave
Chicago | $21 million from FBR Technology Venture Partners, Intel Capital and Warburg Pincus Equity Partners. | The company creates customized interactive audio players that coordinate graph! ic! s, interactive advertising and e-commerce with streamed audio. | TheDial
Seattle | $12 million from Utah Ventures, Vantage Point Venture Partners and others, like VC Tim Draper. | MyPrimeTime and PhoneFree both ran audio ads across TheDial's network of radio broadcasts, which are licensed to sites like Salon and Women.com. | * SOURCE: Companies ListedCopyright (c) 2000 The Industry Standard
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