Size really does matter, at least for the Internet Advertising Bureau (IAB). The New York-based trade group last month issued new guidelines for larger online ads, giving electronic retailers more space to market their products on the Internet.
Susan Murdy, spokeswoman for IAB member Walt Disney Internet Group in North Hollywood, California, said the larger ads won't replace banner ads. Instead, they will allow companies to command prime real estate on a particular Web site. "They allow marketers to own the space," Murdy said.
Although Disney Internet hasn't commissioned any independent studies to determine how effective the new ad sizes are for its advertisers, Murdy said the company has seen click-through rates more than double.
San Francisco-based CNet Networks Inc. was one of the first Web sites to offer advertisers the larger ads. Blaise Simpson, a spokeswoman for San Francisco-based CNet, said recent research conducted by San Diego-based EyeTracking.com showed that CNet readers spent more time with the new ads, liked them better and were more likely to remember the brands than with conventional ads.
One of the firms taking advantage of the larger ads on CNet is Oracle Corp.
"Now we have the space and creative freedom to reach our target audience with a strong and clear message," said Oracle's senior vice president and chief marketing officer, Mark Jarvis, in a statement.
Although the IAB has proposed seven larger ads, Randy Kilgore, executive director of sales and marketing at IAB member The Wall Street Journal Online in New York, said he doesn't think advertisers will create that many ad formats.
"This is a logical step in the right direction," he said. "But I think [Web publishers] need to rally around one or two of the larger formats. Then I think we need to do more research to [determine whether the new formats are effective]."
A Boost for Banners?
By Dec. 20, year-to-date online advertising revenues came in at US$6.1 billion, according to the IAB. Total annual revenue hasn't been calculated.
Banner ads, which contain little information before users click on them, have taken a beating in the past few years as many have questioned their effectiveness, said James Vogtle, director of e-commerce research at The Boston Consulting Group in Boston. He said the new standards might cause online advertisers to take another look at the medium.
Denise Garcia, an analyst at Gartner Group Inc. in Stamford, Connecticut, said that because response rates increase as banner sizes increase, she expects the average click-through rate to double from .4 percent to .8 percent by the end of the year as the new ads are implemented on publishers' sites and rich media formats emerge.
Web publishers will most likely charge 10 percent to 15 percent more for the larger ads than they're now charging for the banner ads, she added.