Less is More in Web Advertising, According To Nielsen//NetRatings' AdSpectrum; High-Tech Advertisers Show More Effective Online Advertising Strategy

Business Wire, May 2, 2001

Business Editors/High-Tech Writers

@d:tech 2001

NEW YORK--(BUSINESS WIRE)--May 2, 2001

Nielsen//NetRatings, the world's fastest growing Internet audience measurement service from Nielsen Media Research, ACNielsen eRatings.com and NetRatings, Inc. (Nasdaq:NTRT), revealed that among online advertisers, high-tech companies have been more successful in their online advertising strategy than digital economy and traditional companies. The latest findings from Nielsen//NetRatings' AdSpectrum service found that a lower exposure to ad campaigns combined with a higher reach resulted in higher click rates.

"Through a low reach, high frequency model, dot-com advertisers have numbed Web surfers by exposing them to the same ads over and over again," said Allen Weiner, vice president of analytical services, NetRatings. "This contributes to low click rates and ineffective branding."

March 2001 research from the Nielsen//NetRatings AdSpectrum service segmented the top 100 online advertisers by industry: digital economy, including dot coms (e.g., RedEnvelope), high-tech (e.g., Hewlett-Packard), and traditional (e.g., Procter & Gamble).

The data indicated that a lower reach, the percentage of active Web surfers who saw an ad, combined with a higher frequency rate, the number of times Web surfers viewed an ad banner, resulted in lower click rates. The high-tech industry garnered the highest reach of 17.1 percent, the lowest frequency rate of 9.4, and the highest click rate of 0.30 percent, with traditional companies following at 11.0 percent reach, 11.6 average frequency and 0.22 percent click rate (see Table 1). The digital economy industry scored a low reach of 12.6 percent, the highest frequency rate at 17.3 and the lowest click rate of 0.16 percent. Other forms of offline media generally have an average frequency rate of between three and four points.

Table 1. Nielsen//NetRatings Key Advertising Metrics by Industry
(U.S., Home)

Industry           Average     Average     Average      Average
                   Reach/a    Frequency      CPM      Click Rate (%)

High-Tech          17.1%         9.4x       $19.30       0.30%
Traditional        11.0%        11.6x       $20.10       0.22%
Digital Economy    12.6%        17.3x       $17.20       0.16%

Source: Nielsen//NetRatings, March 2001
Note: Data is based on analysis of the top 100 advertisers.
/a  Average reach is based on the active Internet population.

"Savvy advertisers working with skilled agencies can try to avoid the current ad fatigue by using rich media and the new larger advertising sizes to refresh creatives," said Weiner.

"Since reach is the cornerstone of most branding efforts, the use of the Web for awareness building will be hindered until either networks band together to provide easy purchasing across multiple channels or the pool of channels dwindle, allowing each channel to capture a higher proportion of unique visitors," added Weiner.

AdSpectrum Availability

The Nielsen//NetRatings AdSpectrum service is currently available.

About Nielsen//NetRatings

Nielsen//NetRatings, the audience measurement service from Nielsen Media Research and NetRatings, Inc., collects real-time data from more than 70,000 panel members in the United States. The U.S. panel sample consists of 62,000 at-home users and 8,000 at-work users. These panels collectively represent the largest representative media research sample of Internet users in the industry. Worldwide, Nielsen//NetRatings services are provided via a partnership with ACNielsen eRatings.com, a venture between ACNielsen and NetRatings, Inc., and measure the Internet experiences of more than 220,000 Internet users.

Nielsen//NetRatings services use unique technology capable of measuring both Internet use and advertising to provide the most timely, accurate and comprehensive Internet usage data and advertising information in the global marketplace. Nielsen//NetRatings services leverage proprietary data-collection technology from NetRatings, Nielsen Media Research's 50 years of expertise in research and audience measurement, and ACNielsen's international leadership in supplying market research information covering more than 100 countries. For more information, please visit www.nielsen-netratings.com.

Note: Please source all data to Nielsen//NetRatings.