Each week, at a new Web site called Microscope, three online advertising agency executives review a different Web ad. No holds are barred. Last week, for example, all three critics slammed a Barnes & Noble banner. But while some ads are being dissected, the site is also serving its own ads targeted at online marketers and ad geeks.
In some ways, it's a self-referential hall of mirrors celebrating online advertising -- which might be the average Web surfer's idea of some hitherto undiscovered 10th circle of hell. But the orgy of self-absorption is clever and addictive. Even if you don't really care about the limitations imposed by skimpy Web browser color palettes or Web site rules against looping animations, it's still hard not to be riveted by Microscope's ever-so-late-'90s devotion to advertising deconstruction. Indeed, one of the site's best features is its promotion of plain-spoken negative feedback. Especially in the ad world, any publicity is good publicity.
"We've got agencies falling all over each other submitting ads to us right now and trying to get their banners reviewed," says Microscope publisher Andrew Bourland. "It's a good showcase, even if they get a bad review."
Bourland also says Microscope -- part of the ClickZ network, a group of five sites all devoted to online marketing -- has no problem selling real advertising space. At Microscope, unlike elsewhere on the Web, there is zero backlash against commercial intrusion. There's nothing more honest, or appropriate, than targeting ads to an audience that has gathered together to watch ad execs rip apart each other's ads.
Bourland says Microscope isn't selling the showcased ad spot. The editors of Microscope, he says, choose from the submissions each week based on such criteria as whether the ad will provoke interesting commentary. Microscope doesn't even track the "clickthrough" rate on the featured ad -- the percentage of viewers who actually click on an ad.
Which makes for the kind of amusing irony that postmodern advertising aficionados are wont to delight in. For there can be no doubt, even in the absence of actual measurement, that the clickthrough rates for Microscope's featured ads are likely to be very high -- certainly much higher than the rates for the actual ads that Microscope runs. It's only natural for viewers to want to compare their critique of the ad with the reviewers' informed appraisal. If one ad exec says the "jump page" -- the page loaded after the first click -- is truly awful, chances are good you're probably going to want to see that for yourself.
In a climate where a 2 percent clickthrough rate is considered worthy of a hallelujah chorus, anything higher is nothing to snort at. The sad truth for the online advertising industry is that overall clickthrough rates have declined steadily since the debut of Web banner advertising some four years ago. Surveys repeatedly show that the longer someone has been online, the less likely that person is to click on an ad. As the Web has matured, the novelty of interactive advertisements has plummeted.
The number of people who click is shrinking and shrinking and shrinking," says Bourland.
And that brings up the underlying question that is Microscope's reason for being -- how do you make banner ads work on the Web? There are plenty of advertisers who will say quite frankly that Web banner ads don't work -- and that since they don't work, Web sites that lust after advertising revenue should be prepared to give advertisers more value for their money. Which usually means more intrusive advertising -- pop-up windows, more on-screen real estate, sound and video elements.
Intriguingly, the online advertising execs who review ads for Microscope -- people who actually create Web banner ads -- see things differently: Banner ads, they argue, aren't broken; they're just not quite perfect yet -- and they're still awfully immature.
"Given that the Web as an advertising medium is only 4 years old," says Kevin Groome, executive vice president and creative director at Welch Nehlen Groome, "there really aren't any experts yet. We're all novices."
The first corollary of Groome's observation is that no one really knows what they're doing yet. That's why Groome says he enjoys participating in Microscope -- it gives him the chance to know what his peers are thinking about in an industry where each new day augurs a possible 180-degree swing in advertising strategy. But there's another, equally significant ramification -- the really creative advertising talent still has yet to focus with full attention on the possibilities of the Web.
"It is tough to talk an art director and copywriter off of TV to come write banner ads," says Matt Freeman, executive creative director of Modem Media Poppe Tyson. "But we're seeing more and more a trend towards integration -- teams that are working in all media -- and I think that will eventually up the quality of creativity."
Of course, those TV-obsessed art directors and copywriters are lucky -- they don't have to worry about clickthrough rates because clickthrough isn't possible in their chosen medium. This is a point that irritates the creators of online ads no end. If clickthrough rates are low, banner ads are considered a failure by the companies who want to advertise their products, even if those same ads are being witnessed by hundreds of thousands of eyeballs.
Groome says that if he ever generated a 1 or 2 percent response rate for a direct mail marketing campaign, he'd consider that a massive success -- and yet online advertisers would still be unhappy at that kind of response to a banner. Furthermore, direct marketing is much more expensive than online banner ads -- postage alone is a killer.
"If I have to choose, I'd choose banners over direct mail any day of the week," says Groome.
Advertisers, noted several of the agency executives featured at Microscope, need to decide whether their goal is to build brand awareness or to generate direct sales through high clickthrough rates. Too often, they confuse the two.
"Is it brand, or is it clickthrough?" asks Daniel Stein, executive producer at Anderson & Lembke. "The real difference with online is that you have this mixture. It's become something of a problem with some of our clients -- we'll put together an online advertising campaign in which clickthrough isn't an objective, but the clients still want the clickthrough numbers and will deem the campaign unsuccessful if they don't get a high clickthrough rate."
Then there's always the question of whether significantly raising ads' ante of splashiness will work to an advertiser's advantage. As Stein notes, Web surfers have come to accept banner ads, but they don't show any signs of warming up to pop-up windows. More bells and whistles don't automatically solve the problem.
"There is a galling lack of creative quality in online advertising right now," says Freeman, "though I don't think that's the only cause for falling clickthrough rates. I don't think changing the format is the automatic answer. You can be more intrusive and louder and that doesn't mean that you will be building a brand any more effectively. That being said, there is obviously a lot of advantage to having more latitude in using sound and video and things like that -- you can tell a richer story."
Perhaps the best lesson to learn is the one that Microscope is offering: Give the eyeballs what they want."Microscope is targeted at a niche audience," says Bourland. "The real value proposition that we offer -- the eyeballs that we aggregate, the kind of people who are coming here -- are people spending money on online media campaigns, buying the necessary systems and software to support that and monitor that. This audience represents enormous buying power."
So does the Web's audience as a whole, if advertisers can manage to figure out how to capture its attention without generating rampant alienation. If you're interested in watching those advertisers think out loud as they work on the problem, Microscope is a good place to start.