Change happening fast in on-line ad sales world

Moderated and launched by Evan Neufeld, practice manager for on-line advertising strategies at Jupiter Communications of New York City, the topics raced from measuring audience participation to packaging the "value proposition" to recruiting and retaining an on-line sales force.

The common theme: It's changing apace.

As the number of on-line users grows, from 37 percent today of current American households on-line growing to 60 percent expected by 2003, it begins to resemble the proportion of other media users and the general demographics. The heaviest users are the most coveted by advertisers, young adults 19 to 34 years old, which are 43 percent of the on-line audience and tend toward 10 hours a week on-line.

"There are a lot of them and they tend to use on-line frequently," Neufeld said.

Information rather than entertainment drives the on-line user. Top actions are: exchanging e-mail; using search engines; researching products and services; researching local events; restaurants and news; visiting news sites and using on-line directories.

The exceptions are children: "Kids do come on-line to play," said Neufeld.

On-line time is still cannibalizing more from television and magazines than newspapers. And on-line time is action time; many young users go on-line to research, with an intention to buy.

That's where advertisers are conflicted about the nature of their messages. There are some who view on-line as a direct marketing channel, like direct mail without the stamps, while others favor brand development, to encourage purchase action off-line.

Nevertheless, on-line is more fixedly in the media mix, Neufeld said. For example, International Business Machines has moved 10 percent of its annual advertising budget on-line. Other categories where direct-action leverage is attracting advertising dollars include financial services, automotive, travel, computers, technology; what's not budging are consumer packaged goods and household products.

Jupiter predicts that more than four percent of total advertising spending, $7.7 billion, will be on-line in 2002. The biggest shift felt by newspapers will be classified spending, as almost 10 percent, or $1.9 billion, is expected on-line in 2002.

What advertisers want is a clear pathway to the consumers most likely to make a purchase. And that's where newspapers need to start thinking creatively about their roles in the product sales process. Delivering eyeballs isn't enough, panelists agreed.

Newspaper new media outlets must measure that they can deliver an audience using conversion rates, not just with "click through" numbers.

Neufeld posited that advertising executives still don't entirely trust the on-line audience measurements they receive, with 56 percent of respondents recently saying they suffer from "lack of reliable and accurate measurement information," down from 68 percent in a previous survey.

Panelists identified Media Metrics as the most consistent reporter of audience statistics, even if the accuracy and analysis could be improved.

While national advertisers don't totally believe the figures, "at least it's an even story across all those sites with Media Metrics," said Dave Beaupre, senior director of sales at Washingtonpost.Newsweek Interactive, based in Arlington, Va. Meanwhile, it's learning from the cable and television division about counting visitors.

Just a head-count isn't enough for ad buyers, however, and increasingly demographic information, the kind best gathered by voluntary registration and "information for reward" sign-ins.

"At some point in time every media is going to be held to the standards of new accountability," said Tom Stockham, vice president of partner development for Ticketmaster Online-CitySearch Inc. of Pasadena, Calif.

One advantage for newspapers is that local advertisers are less dependent on statistics than national advertisers. "They aren't looking for click-through rates and extensive data; they can measure what happens when that ad appears on line," said Chris Jennewein, vice president for technology and operations at Knight Ridder New Media in San Jose.

Those statistics put increasing pressure to discount advertising costs based on cost-per-thousand rates, as those counts put banner ads in the commodity category. Instead panelists agreed that packaged buys, both print bundled with on-line plays and packages of on-line services, are the revenue leveraging moves.

Instead of putting auto ads on the Web, newspapers must think about being partners in helping auto dealers move cars.

The Internet is not about cannibalization, taking money from one place to feed another but instead is about attaching a whole new set of revenue streams to a core activity, Neufeld said. And newspapers can start bringing trickles of revenue in by serving the seller as a partner, either through commissions or customer-oriented services or content leveraging.

One hurdle: For newspaper sites to succinctly tell advertisers what they have to sell. With so many "applications," advertisers aren't sure what they really stand for, explained Liz Levy-Navarro, partner at The Cambridge Group, Chicago, Ill.

It's easy to identify who goes to a site that sells toys, for example, but "I think that in this industry, we nave more of a challenge, because we have more applications," she said, so there is a greater need to define who are the users.

"One challenge is to separate and articulate the large value proposition available on the site."

And by integrating into the advertiser's business, it's necessary to define the opportunity before assigning an advertising fee or charge.

Does the newspaper's on-line feature represent a lead generator or a customer-service feature for the advertiser? Will it bring people to enact a buying decision or improve the brand identification?

Knight Ridder has succeeded with co-marketing ventures with some major brands, Jennewein said.

Levy-Navarro suggested thinking creatively about new applications, using the example of Babycenter.com and financial services tie-ins with college-savings calculators.

Think about interactivity and the customer's business to develop content or applications to make the sale.

Beaupre mentioned complex co-sponsorship deals, similar to traditional special sections or special event tie-ins. One product in progress is converting the 15-hours a week of live discussion programming to an e-mail product, "that makes a line easy to walk advertisers through."

Forming a sales team to surmount the confusion about on-line and newspaper products is equally challenging.

Sales people with print advertising backgrounds frequently have "a disastrous time," said Beaupre.

The same is true for directory sales, radio and TV.

"Your customer, I don't care who they are, whether they're a pizza parlor or an IBM executive, doesn't know what to expect from this media," he said. This isn't strictly a circulation buy or a direct marketing buy.

"If you have content adjacency ads and employment classified ad and a direct response form, you are selling three really different products at the same time, and probably you had three different people selling before, and now you are asking one person to sell all three."

These staff can't rely on old sales relationships, either, said Stockham. The new media sales person needs to be ready to work as an evangelist, educator or whipping boy, and he recommends hiring someone at the "up and comer" point in his or her career, still hustling, rather than someone who has made it to the top of the game.

Jennewein said that Knight Ridder papers have dual staffs, one supporting local on-line sales, another chasing national buys.

And Beaupre uses a team approach, where on-line evangelist/educators work alongside traditional newspaper ad sales staff and also pitch themselves, with rewards for both when they sell.

Recruit carefully, train thoroughly, then, keep them if you can, as the likes of America Online, a few blocks from Beaupre's office, looks to pluck sales talent.

And work on customer service and monitoring satisfaction, to keep restless advertising buyers engaged, he said.

-- Marion J. Love