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The Hazards of Online Advertising

Seattle’s Internet startups are pretty skeptical about the benefits of online advertising. That’s one of the main things we learned at the Online Advertising forum, hosted by the Seattle Online Network in mid-February. For one, there wasn’t a single Seattle-area Internet company among the forum sponsors. And the four panelists, all in the online advertising biz, were often put on the defensive.
Why? Seattle Internet companies are fairly young and don’t have national brands. So Internet advertising for them remains a big gamble. Instead, they’re more focused on traditional media-print (Onvia’s one-page ads), billboards and buses (mylackey.com) and even TV (Blue Nile, the diamond e-tailer).
Affiliate-marketing programs are also quite the rage. Gear.com, for instance, is just about to launch an affiliate program (other websites agree to feature its discount sporting goods). And in the process, it’s tapping into new target audiences, like kids going away to camp and members of 4H clubs.
What makes for an effective online campaign? Here’s the gist of panelist comments:

    *** Lower expectations by 75%. This sobering advice came from John Durham, VP of Sales of Winstar Interactive, which works to establish brands on the web. And then, he added, the startup should come up with a plan for the next 18 months based on those very low expectations, even before the online ad campaign launches.
    *** Test, test, test. It’s stupid to throw money at a full-blown campaign without first gauging potential response. Also consider using online focus groups; they’re been found to be as effective as live focus groups.
    *** Don’t make too many assumptions about your target audience. A lot of the stereotypes are being broken down. An ad for tights on a financial site may pleasantly surprise a college co-ed enough to respond.

What about websites wanting to attract advertising? Again, Durham of Winstar told it like it is: The vast majority of ads are going to 75 top sites, he said. Typically, you must have at least 600,000 hits a month to be considered for ads. And then you must know your users’ patterns well enough to make promises to advertisers that are realistic.
Big-name ads do add a certain legitimacy to new sites, the panelists agreed. And that’s something that car companies have evidently used to their advantage.

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Soula Jones is Content Chief at Seattle24x7.com