Does Online Advertising Work?

The Best Report I've Seen in Awhile

Adage has just released a report that basically sums up the state of online marketing advertising.

Titled Building Brands Online, it actually provdes a very detailed look at all the arguments of branding vs direct response, the results of various research into the effectiveness of online advertising, the problems and opportunites faced not just by online marketers but by the marketing and advertisng industry as a whole.

It's not a light read, but it is an essential one. Sort of like an online marketing and advertsing primer for 2010.

Some of the interesting points are:

Traditional offline advertsing still accounts for the vast majority of marketing and advertising spending accounting for:

70% of Direct Marekting dollars spent

94% of Branding dollars spent.

A recognized and standard way of measuring online advertising effectiveness has not been developed and is a barrier to further adoption. Many businesses want to know what they are getting for their advertising spend and online advertising has too many confusing ways of telling them or, more to the point, not telling them.

How measuring clicks vs "brand awareness" has become the bane of online advertising agencies. Rightly or wrongly, the use of clicks and conversions is what many businesses focus on. Yet agencies have yet to convince their clients of the value of branding and the creative in online advertising.

Not surprisingly really given online advertising's almost non-existant click thru rate.

"The overall click-through rate for static ads is 0.1%, for Flash ads, .09%, consistent with 2008.” – DOUBLECLICK, 2009 YEAR IN REVIEW BENCHMARKS, RELEASED JUNE 2010"

Social media may not be the best place to advertise, at least not in the traditonal display sense.

The online and offline marketing worlds are seperate and need to be unified. This is a big issue and another obstacle to online advertising really taking off.  It points out that online marketers tend to be heavily technology focussed, whereas offline marketers have the expertise in creative and selling.

Again this seperation is bad and confusing to the customer: IE the buyer of advertising.

The report also gives examples of companies that are doing online advertising right in innovative ways such as Chevrolet, Ford and Macy's.

I've only skimmed across a few points here and the report is full of examples, research notes and loads of charts. So if you're hungry for info and data, or just want to get an understanding of where online advertsing is at, then read the report here.