NEW MEDIA: Web words - Creative thinking could bring FMCG ads to the rescue

With many of last year's biggest-spending online advertisers either collapsing or entering into marketing hibernation, the big hope for internet ads in 2001 lies in FMCGs. The prevailing market view seems to be that those that spend megabucks on traditional media will finally wake up to the irresistible online opportunity and save the bacon of those web sites that rely on advertising to survive.

With many of last year's biggest-spending online advertisers either collapsing or entering into marketing hibernation, the big hope for internet ads in 2001 lies in FMCGs. The prevailing market view seems to be that those that spend megabucks on traditional media will finally wake up to the irresistible online opportunity and save the bacon of those web sites that rely on advertising to survive.

But in the same way those traditional retailers - I think we called many of them 'dinosaurs' last year - were slow to start picking over the bones of dotcoms, many FMCGs still have a long way to go before they see the kind of value in dotcom advertising that will make large quantities of offline budgets migrate to the net.

Many web sites may have to think far more creatively about how they sell their space in order to avoid a sticky (in the terminal sense) demise.

I'm not one of those people who think that the banner is dead - I just think it's rather neglected or misunderstood. What is too often forgotten is that banners are delivered by ad servers that offer excellent targeting and unrivalled accountability. There is also a mass of inventory to play with. If only sites would use these advantages to prove the value of their advertising.

Instead they stick to inflated rate cards that leave over half their ad space rotting on the vine and the rest with a large question mark hanging over its usefulness.

Given that one of the internet's strengths is its ability to support new pricing models it is surprising that many sites haven't even learned a few basics from the real world. Most web sites are happy to charge a large amount for one type of ad and fill unsold space with house ads.

There are plenty of old world examples that give us a clue to what can be done to change this. Airlines, for example, don't fill a third of their planes with business class passengers paying loads of money and the rest with staff that pay nothing. Instead, the rest of the plane is made up of customers paying different prices according to their need for comfort, punctuality or service.

FMCGs are going to need to see a much more imaginative range of options from internet advertising before they go far beyond dipping their toes in the water stage. But if we create new packages we should be confident.

Online ads can do things that offline ads can't. They can offer click-to-buy campaigns, for example. With online supermarkets offering national delivery there is nothing to stop Friskies from buying an ad on Yahoo!

that clicks to a promotion on Tesco that will have 24 cans of cat food on your doorstep by tomorrow morning.

Around 80% of ad banners on the web remain unsold. Each unsold banner is an opportunity for communication with a potential customer that goes to waste. By dropping the price of this unsold inventory and delivering it using the full power of ad-serving technology, FMCGs will find the web a compelling place to sell products and promote brands.

It is well within the power of most web sites to invite the biggest advertisers to try them out for size now and retain the initiative. The alternative for many will be to try to sell advertising at the same rates that has already driven many dotcoms to extinction. The agencies that buy ads for FMCGs will 'do the maths' and will not accept the resulting cost of customer acquisition or the opportunity cost for brand-building.

There will always be sites that sell out and do not need to compromise their prices. But these will tend to be specialist players that sell to advertisers with a high cost of customer acquisition, that sell products suited to online purchase. For the rest there are two likely outcomes.

Either they'll invite the FMCGs in now or they'll stick to their guns and find themselves dictated to by those with the power to make or break them.

Neil Morgan is chairman of e-Space.



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