Pop-ups were a frequent topic of discussion, derision and debate at the December iMedia Summit. Debra Meyer, vice president and director of sales for Nielsen//NetRatings, presented the company's findings about advertising intrusiveness—then the audience had its say. Here's the transcript of her remarks.
Host: While the industry turns towards bigger, more intrusive advertising, the consumer reaction to these ad formats becomes certainly more vocal. How intrusive should ads be? Is there a limit to what an Internet user will put up with? Debra Meyer is vice president and director of sales for Nielsen//NetRatings. Her company's research today will help to shed light on how marketers and agencies can address the very important creative challenge. So please join me in welcoming Debra Meyer.
DM: Good morning, afternoon, to everyone. Marc Ryan, who is our vice president, director of analytics, to give justice where justice is due, this is his presentation, but he could not make it here today. So I'm filling in for him. So bear with me a little bit. I think there's just a lot of good information here that you guys will like a lot.
The thing about Internet advertising right now, what the really good news is, is that it is becoming more effective. The bad news and our challenge right now is to manage the fact that it is becoming more intrusive and the consumers are really being vocal about the fact that the advertising is becoming more intrusive.
I think with any problem, anytime anyone has a problem, it's always great if we could say, "If we just change this one thing, the problem would go away." If we're going to look at a past history, we look at the economy and the problems that the economy had, it was the dot-coms. Everything was blamed on the dot-coms. Nobody really thought Wall Street corruption. There were a lot of things that happened—the lagging economy—but the dot-coms, not that it didn't have a lot to do with it, but it really bore the brunt of that problem.
If we look at the privacy issues, when everyone was so first concerned about privacy, there are so many issues around that, but again, Double-Click became a little bit of a scapegoat there in terms of the privacy issues.
Effectiveness when Internet—we thought click-through was going to make Internet advertising the most measurable medium, and as we all kind of learned, that click-through really wasn't the thing that we can all turn to and just say, "Click-through. That's going to answer all our problems."
If we looked at spam, direct marketing right now has really gotten a bad name, so to speak. There is so much good stuff that's happening with direct marketing, whether it be your Yahoo! Finance Alerts or the daily candy, the success that that company is having. There's just so much success, and what people look at when they look at direct marketing right now is the porn stuff and the Viagra ads, and isn't direct marketing just the big problem.
With security issues, people think it's just the hackers. They're the ones that are ruining the security issues. But if you think of that, even with your catalog ordering, you give your credit card online to somebody or traditional media over the phone, and you're going to have leaks with your credit card. It happens all the time. But people look at it like, "Oh, this is the Internet. It's an Internet security problem."
Cannibalization. The channel conflicts. It's not that online and offline can't work together. It's just we haven't figured it out yet, or there are lot of companies that haven't figured it out yet. So they're just saying it just can't work. It can't be married together, when of course it can, and there a lot of companies that are doing it really well.
So now to get to the main point of the presentation. The advertising, the pop-up, has really been put up there now as like the pop-up is evil, it's too intrusive, the consumers hate it, and we're going to see in the slides that if we don't do something better to manage that, it possibly is going to be the end of the pop-up.
Advertising, if you think about it, is by its very nature intrusive. No consumers are going to say, "Give me more advertising, put more commercials into my TV, put more on my radio, put more in my magazine." It's intrusive. So this isn't a new problem. A lot of what the panel was talking about today is to marry the Internet with more of the other types of media, and this is a perfect fit. This is the same problem that's in all other media, and you'll see in the presentation I think we're overreacting to it a little bit.
What we see is the size of advertising is growing. This is an Ad Relevance study that we did from January 2002 to November 2003. Just the size, the width, the height, the amount of real estate that these ads are taking up on people's sites has doubled. So it's pretty significant data to double in that amount of time.
The off-page advertising is growing, just the sheer types: pop-ups, pop-unders, interstitial, pre-stitials—it's just growing. Also a study from Ad Relevance, January 2002 to November 2003, it has grown from about 2 percent to 7 percent, and we see in July a spike of almost 9 percent. So just the amount. And there's a reason that it's growing. It's more effective.
This is a study done by Dynamic Logic, and it's basically saying that all (advertising)—and again, we're not just talking about the pop-up now; it's interstitials, it's pop-unders, it's all the kinds of advertising that's taking up more space on the user screen—is more effective. So whether it's branding, whether it's driving traffic, whether it's getting your e-commerce results, it is being proven to be more effective.
The next study that we find that was in Nielsen//NetRatings Web Intercept; it's totally counterintuitive to exactly what I just said, which is people are saying they don't like this. Again, it's interstitials, it's the floating ads, it's the pop-ups, it's the pop-unders. They're saying, "I don't like this type of ad." So you're, like, on one hand, this is more effective, but I don't like it. So what's happening here? And the other thing, the publishers, because they're more effective, are getting more money for these types of ads. So we've got all kinds of mixed information here now, and we really have to be the ones to decide what we're going to do with it.
Another study that we did at Nielsen//NetRatings, we wanted to see what are consumers doing. They're saying that they will avoid sites with these types of ads. And again, this is not just the pop-up. This is all the kinds larger ads. They're saying that they will avoid the sites.
But we believe this is like an over projection. People can say, "I'm not going to watch CBS. They have too many commercials," or "I'm not going to do this, not going to go to Fox," but at the end of the day, if they want to see that content, that's where they're going to go. It's not such a new problem, this problem. The way that we handle it right now is what is key and what needs to be figured out.
This is again talking about television. Given the opportunity, people will avoid ads. So in any other media—TV, radio, print—print, maybe now people kind of do like the ads a little bit more and maybe the Super Bowl ads, but people, if given the choice, they will say, "I don't want the ads."
And to make matters a little bit worse is we really see that the industry is responding to the consumer in a way that's going to affect our business. The pop-up's finally something that's effective in a negative way. Microsoft is releasing their new version of IE with a pop-up blocker. So with all this software, Yahoo! and the sites are definitely caving in a little bit to consumer demand and saying, "We're going to block the pop-ups." So this really could be a huge threat and the end of the pop-up.
What we feel we should do with the IAB and (what) the U.K. is doing is putting frequency caps on these types of ads. We actually think that that is a really good solution, really kind of want to get behind that solution by saying if we cap the frequency, kind of bring it to a point where the consumers can deal with it, in the same way, it keeps it effective, keeps it generating revenue for the publishers. Overall, it's a win-win situation.
In summary, we feel that the off-page advertising is helping the publishers. It's more effective. But it is more intrusive. The consumers are not going to like it, but it's our job to—we just can't respond so quickly, just because they don't like it, and say "We're going to allow you to block it and take it off." We have to figure out a way to manage that, and we believe that is the frequency capping.
Given their desire, they'll just take out all advertising, whether it's radio, whether it's TV, whether it's Internet, and we don't want to have the pop-up be the scapegoat for all those types of advertising and, really, advertising in general, and this is the first thing that we feel is really working, and we're going to shoot ourselves in the foot if we over saturate the market with it or if we respond with all the blockers.
Again, we feel that the regulation that the IAB is doing is really the best way to handle this.
Questions?
Dave Smith: Dave Smith [Mediasmith Inc.]. The research you showed from Dynamic Logic didn't measure pop-ups. You're making an assumption there, bigger ads equal pop-ups, and it's a fallacious assumption.
DM: OK.
DS: The other thing, the big issue, is there is no technology that can frequency cap across sites. So I could get the pop-up from one site, get the same pop-up from another site 10 minutes later, same pop-up from another site 10 minutes later. So if you're going to suggest a solution, you've got to have some technology behind it that can implement that solution, and it's not implementable right now.
DM: Right. I know that they are doing that in the UK, and I'm not sure what they are using to do that, but that is something that is being done. I can get you a little bit more information about what they're doing in the UK, but that's something that's happening.
Host: And, Dave, watch your language. That's the last time I want to hear "fallacious" from you.
Audience Participant: More of a question for the sellers. For those of you who are pop-up dependent, whether it's an advertising vehicle that you sell or it's a survey that you use, how are you going to respond to the blockers? I know a lot of people in here were talking about the Google bar and the Yahoo! bar, and it's become almost a competition to see who gets more pop-ups blocked. I'm just curious how you're going to respond to that issue.
Host: Any sellers want to take that? I can certainly synthesize some of the discussion we had about pop-up blockers at the seller forum. There was something of a split, but a lot of the publishers were saying that they were really planning for the end of pop-ups, that they looked at it the way that the magazine industry looks at tobacco advertising. Some day it won't be here. We plan accordingly.
The one issue, though, that people brought up was the fact that these pop-up blockers will block pop-ups from sites but they will not block the pop-ups that are spawned by Gator, WhenU and the other vendors that are implanting stuff on the hard drive. So that changes the picture a little bit. It could be the fact that we have no more site-generated pop-ups, ad-server-generated pop-ups, but we end up having a lot of system-generated pop-ups.
Question up here?
Audience Participant: I was going to respond to—my company probably—going out on a limb here in saying this—but we probably serve more pop-ups per day than anybody else.
Host: Say it [inaudible].
Audience Participant: Sure. Advertising.com. Everybody over the last year has anticipated over time the demise of the pop-up, if you will, and intentionally diversified through more and more various formats. I think the writing's clear on the wall. If pop-ups do disappear—and obviously, with the new version of IE that's coming out next year that won't support pop-ups at all—what you will see is ads that are going to be much larger inside of the page itself and overlays like [inaudible] and other forms of advertising.
So at the end of the day, pop-ups do work right now. We're certainly seeing more and more resistance in things like pop-up blockers having an impact, but it doesn't mean necessarily that big ads are going to go away. They'll just take a different form.
Host: Quick question up here, and then we'll go back to the back.
Audience Participant: I kind of had just a bit of [inaudible] so people know. I think Doug's right. The issue of blocking pop-ups is a lot—I talked to the people who do that, the companies who have those tools, and it's a lot more complicated than you'd think in trying to actually set code that does it. So as to whether or not those actually are solutions or not—there is an IAB committee that is actually chaired by Rich LeFurgy, who is the former chairman of the IAB, which is very focused on the pop-up issue because we recognize the data, especially the public's view of this. So I would encourage you very much to seek me out or seek out anybody at the IAB and get involved in that committee. In fact, specifically, Microsoft has asked that committee for some opinions in helping to set their stuff. So this is an issue that is going to go on for a little while.
Host: Alan?
Alan Gerson: Alan Gerson, iMedia. I think you're right. This is not a new problem. For 25 years, the television business did consumer ads to push free TV, saying, "If you like the content, you have to take the ads." I would suggest that we should consider consumer advertising to make the case that the rich content available from sites on the Internet is paid for by advertisers.
DM: That's exactly right.
AG: I have a pop-up blocker software, and one thing that they also block is content on sites, from my bank to other ones, and I think that that's going to be an issue for people who build Web sites. You're surfing around, and sometimes you're not being able to access the content because of the pop-up blockers.
DM: Right.
Host: It's also going to be an issue in how we do online research, because as some of you have noticed, Dynamic Logic and other companies use pop-ups to do a lot of the instant polling that drives things. So that's something else to think about.
Wendy Dunlap: Hi. Wendy Dunlap, from Horizon Interactive. I have more of a proposition than a question or a comment. It seems to me that the reason for a lot of consumer dissatisfaction with pop-ups is not necessarily the frequency of them but the lack of contextual relevancy of them—that they are on content sites and receiving pop-ups for products or services that are completely unrelated to their frame of mind. So it becomes a challenge for the planners on the agency side to being more strategic in how we're implementing pop-ups in campaigns.
You have services like WhenU—who I just happened to be sitting with, but that has nothing to do with the reason why I'm citing this example—where the pop-ups are contextually targeted. So you're seeing a positive response and you're seeing users who obviously, because they continue to be WhenU subscribers, do not have issues with pop-ups. So I think it's actually a challenge for us on the agency side to find more innovative ways to utilize and implement pop-ups in our media strategies.
DM: I think that's a great point, and I'd be curious to see if we decided to do another survey to add another layer on that, to say if they were targeted to you, if they met something you were looking for, would you have quite the same negative reaction, and see where that would fall. I think that would be really interesting.
