Keeping an online eye on you

Banner ads, the ones that pop up on computer screens as you surf the net, are big business, predicted to soar from an annual value of £50m last year in Britain to £625m by 2004. In May alone, the world's top 1,000 websites racked up a total advertising throughput of £650m.

Banner ads, the ones that pop up on computer screens as you surf the net, are big business, predicted to soar from an annual value of £50m last year in Britain to £625m by 2004. In May alone, the world's top 1,000 websites racked up a total advertising throughput of £650m.

And that big business is keeping a beady online eye on you. They want to know exactly how to shape their marketing ploys to zero in on your spending habits, and prise a few more pounds from your pocket.

For example, a consumer looking at holiday websites will be targeted with advertisements for possible add-ons, from hire cars through scuba lessons to travel insurance.

But banner ads can also have a negative impact on business, because some pop up in unwanted windows, irritating potential customers and slowing searches. Other banners are executed so amateurishly they arouse viewer derision, so damaging global brand names which international companies pour millions into developing.

Online advertising is becoming increasingly sophisticated. And as people surf, the major companies are monitoring, watching which websites grab their attention.

Most internet users and designers claim to hate banners. But many websites relay on banners for a significant part of their revenue. A survey by the technology analysis firm, Continental Research, found more than 50 per cent of internet users had clicked on a banner advertisement. Respondents said they read or "glanced at" approximately 25 per cent of them.

The most common criticism of the advertisements is that they are ineffective. Their success is measured by how often people click on the banner and jump to the advertised website. Research shows internet users click on 0.5 per cent to 6 per cent of advertisements.

Banner haters say that is derisively low and ask whether it is worth cheapening your design for little effect. But George Shaw, managing director of advertising and communications company Joslin Shaw, says if 0.5 per cent of people walking past a poster were to rush off and phone the advertiser, that would be considered a miracle.

Companies which sell advertising on the internet, including Engage, DoubleClick, AdLINK and 24/7 Media, try to match users to advertisements. Done properly, this can be a boon, say with mortgage ads appearing onscreen when surfers house-hunt, and jewellery and florists' ads popping up when they check on etiquette for a wedding.

Engage tracks website visits and builds a profile of the viewer's usage. Sites subscribing to Engage's service allow the company to alter the displayed ad on their web pages to target a particular user.

So if someone is expecting a baby, Engage could identify this from the websites they visit and flick up associated banners, say, those for maternity clothes. Once the baby has arrived, the internet user will look at different websites. Engage will spot the change and display advertisements for products such as mail-order nappies. But the company never links the anonymous identity of the internet surfer with their real name and address. Earlier this year, Engage's main global competitor, DoubleClick, tried to do exactly this. It bought a direct mail company and was trying to get the names and address of its anonymous internet users, planning to use the information it had gathered on people's web-browsing habits for a direct mail business. This triggered such an outcry from consumer affair and civil liberty groups the company had to abandon the plan.

Although targeting is vital to increase the effectiveness of banners, so is their design. Research by the internet media company AdLINK shows animated banners are noticed more than static ones, and adding the words "Click Here" increases the number of "click-throughs."

The same study also measured brand attitudes before and after seeing the banner ads. Researchers found a good television and print media promotion for a car which might have cost millions could be damaged by a banner which was out of kilter with the advertising campaign.

Engage researchers made similar findings. "The brand impact of banner ads is much higher than people think," says Peter Chaplin, the company's international vice president. AdLINK's investigators found internet users from different countries did not share similar reactions to banners. For example, only 1 per cent of the UK panel thought banner ads were funny compared to 13 per cent in Spain, where advertisers have made a conscious effort to be humorous.

Richard Holman, managing director of AdLINK UK, says: "British advertisers need to look at the way they approach the design of banners. Most ads lack real redeeming features. Advertising companies need a much more imaginative approach to the creative side of banner ads. A well-executed ad will generate significantly higher clicks through and, more importantly, will communicate a brand message much more effectively." Well-designed ads will cost more, he warns.

The increasing sophistication is demonstrated with pop-up windows, the ones that jump onscreen without warning, sometimes with sound and moving images. Popular wisdom has it that static 6ins by 1ins banner ads are mostly ignored, but the pop-ups seem to be uniformly loathed. Web experts put this down to "poor targeting". With high-speed connections delivering data 10 to 25 times faster than a standard modem, such as ADSL phone connection and a cable modem, the mass-market approach is starting to change. With these technologies, video advertisements with sound suddenly become easy. But so far, webmasters are unable to tell if a site visitor is connected through a five-year-old "slow"modem or an ADSL connection.

As internet technology edges into a TV-quality experience, the power of web advertising will increase dramatically. Advertisers slow to adopt a more professional approach to banners and other online advertising risk damaging the expensive work their colleagues have done in other media. It is time for the internet advertisement to grow up.