Media Metrix Europe: 1+1=3

Online advertising remains of interest.

All the said "reliable" media, whether they are on line or off line, have been spreading the latest set of data released by MMXI Europe about the number of Internet users in France.

Just think about it: 22 million French people would have access to the Internet and 12.8 million French people would actually use the web on a regular basis (connection at least once in the last 30 days).

According to MMXI, Internet would have become a real mass media, with 37.6% of the French population having access to the Internet.

I must admit that such figure seemed to me a bit much, that's why I tried to match it up with reliable sources.

In order to do so, I did not only use the MMXI press release from 27 Nov, 2000, but I also referred to the one MMXI Europe released on 17 Nov, 2000 and that was called: "One year of Internet in France".

We learn in this press release that, according to MMXI Europe, 63% of the French Internet users were younger than 35 in September 2000.

Extrapolating from the fact that 22 million French people would have access to the Internet and that 63% of those 22 millions would be younger than 35, we get 13.86 million French people younger than 35 who have an Internet connection.

I then referred to the last census of the population that was taken by the Insee (Institut National de la Statistique et des Etudes Economiques), which indicates that there are presently 13 million French people aged 20 to 34 in France…

At that point, I thought I had made a mistake since I could not have 13.86 million Internet users for 13 million people only. I then decided to add two years to the studied age group (the 18 to 20) so that the MMXI figures could make some sense.

If I refer to the last census taken by the Insee for this given age group rating from 18 to 34, I get 14.6 million French people.

This is better since it now means that 94.4% of the French people rating from 18 to 34 would have access to the Internet (this is still according to MMXI Europe). Three cheers for France, don't you think?

Let me remind you that according to Nielsen/Netratings (Oct 2000), as far as the American population is concerned, 54.2% of the American people would have access to the Internet and 33% would be considered as regular users.

That's why the figure of 12.8 million French Internet users released by MMXI can only come as a surprise when you know how little money French cyber-retailers are actually making.

What's even more striking is the fact that MMXI points out that its panel only concerns home Internet usage, and does not include work Internet usage.

And yet, MMXI indicates in its study that 23% out of the 12.8 million French net surfers access the Internet from work…

Sources : Copyright 2000 MMXI Europe Press Release Novembre 27, 2000 - Copyright 2000 MMXI Europe Press Release Novembre 17, 2000 - The last census of the French population by the Insee

This time last year, online advertising was praised to the sky by most analysts, it was shown as a miracle recipe that made it possible to reach the first e-consumers. Cheaper than traditional advertising, online advertising was supposed to target different types of Internet users in the extreme and even to create a real interactive logic with them. Just take the click rate that was announced at the time, it was often higher than 1 or 2%.

Most advertising companies, born with the Internet or issued from traditional agencies, used to take up these arguments, even though most of them did not really understand what they were talking about.

As a result, many business models based themselves on this source of income, since agencies expected an exponential growth of the investments made by the dotcoms or dotcorps announcers.

And yet, these online advertising promoters (advertising agencies, highly visited websites) dug their own graves by overvaluing online advertising. When nobody asked them for anything, they mainly articulated their speech around the notion of immediate efficiency, mistaking an advertising approach with a direct marketing one.

As a result, announcers got into the habit of measuring online advertising according to the click-rate, leaving aside brand visibility and recognition, etc…

I think this explains the keen interest that is currently shown for email marketing, since the latter is supposed to compensate for the collapse of click-rate on ad banners and should bring a return on investment as high as 5 to 10%. The odds are that the same phenomenon will probably happen with the email within a few months, after the novelty wears off for the Internet users.

But online advertising actors are beginning to realize their mistake and are now trying to educate the market by getting back to more classical communication arguments. After all, who would even think of assessing the relevance of a TV ad that would be broadcasted at the peak hour on ABC by counting the number of phone calls received in the minutes that follow the diffusion of the commercial?

And yet, we must admit that there are still very few independent studies, such as post-test advertising surveys being conducted at the moment even though that would allow announcers to measure how much impact online advertising campaigns really have in the medium term.

The Adknowledge Company, whose job is to advise the actors of this eAdvertising market, partly made up for such deficiency through its last Online American Advertising Report.

It first indicates that online advertising campaigns do have an effect on people, since 32% of all conversions (such as purchase, newsletter registration, request for information) happen after an ad view without a click.

And yet, this indirect effect online advertising has on people wears off quickly. Time lag from view to conversion is halved only 30 minutes after the ad has been seen and it becomes infinitesimal after 24 hours.

This can easily be explained: when surfing, the user finds himself faced with many temptations (banner ads, links, search results in directories, etc…) that make his "discovery" search very erratic and spontaneous. When not looking for a specific object, he will tend to forget the message he registered only a few minutes before.

Internet mostly remains an immediate interactive tool and the behavior people have when faced with online advertising does not escape the rule.

The survey also demonstrates the way Internet users behave in relation to e-advertising. 61% of Internet users who just clicked on an ad banner actually convert on the site. Such high figure reveals that Internet users have learnt to click usefully and that they no longer click out of curiosity.

When I think about it, the conversion rate seems to me much more relevant than the click-rate alone. What's the use of attracting Internet users on an e-commerce site if they are not going to convert on the site?

Source : adknowledge.com