Advertising Breakdown by Industry and Type, December 2006 and January 2007

Nielsen//NetRatings have released their December-January report that gives the US industry breakdown of online advertising placements and types, as well as the top 25 companies placing sponsored links. You can see the summary tables at this ClickZ page.

The boom in bandwidth has had an impact on how advertisers are trying to pitch customers. It looks like Flash adverts have finally come into their own in the US, and in many industries the number of impressions that Flash ads received in January exceeded the number of impressions received by standard images. Rich media ads, not surprisingly, are not making much of a showing at all. In South Africa, where bandwidth continues to be in short supply, we can expect Flash and rich media to continue to have a limited presence, at least for another year or two.

For example, the automotive industry had 2.3 billion Flash impressions compared with only 1.3 billion standard image ad impressions. Flash is ahead in the consumer goods industry, entertainment, electronics, software, telecommunications (12.8 billion Flash vs 3.3 billion standard), travel, and even the health industry. Flash still plays second fiddle in financial services, retail, public services, and business-to-business.

The report also details the top 25 companies placing sponsored links. Here eBay still dominates the top slot with 4.6 billion sponsored link impressions, with Google way behind in second place with 1.5 billion impressions and QuinStreet in third place with 1.1 billion.

What keywords do you have to buy to get that kind of exposure? Well among the top keywords that caused eBay links to appear were “happy new year posters” and “new year graphics.” For Google, it was simply “map” and “gmail.”

How does direct marketing firm QuinStreet get so much exposure for its clients? Long tail keywords like “how to apply false eyelashes” seem to do the trick.

If you are using contextual advertising systems like Google’s AdWords, Microsoft’s adCenter, or Yahoo’s Panama, you will find that not only can longer search phrases get you great exposure and click-throughs, they can be a whole lot cheaper than one- or two-word search expressions that everyone else is bidding for.

Online Businesses Beat Offline Businesses in Customer Satisfaction

One of the prerequisites of successful online business is a commitment to customer satisfaction. The online customer simply doesn’t take the kind of abuse, disregard, or obfuscation that the offline customer is often resigned to. Online customers can go elsewhere at the click of a button; off-line businesses often perceive their customers to be captive because of the difficulty of going elsewhere, which can lead to habitually poor service by offline businesses.

The University of Michigan and ForeSee Results have just released the American Customer Satisfaction Index, which shows that customer satisfaction with e-commerce now surpasses that of offline business by 11.6 percent.

The Customer Satisfaction Index is a 100-point scale, and on that scale e-commerce scored an average of 80 against off-line businesses average of 68.4. Online retail scored 83 as opposed to offline retail’s score of 74.

Of course it is not necessarily a complacent attitude in offline businesses that is at the root of the problem. Online businesses have a major advantage in both information and flexibility. They are able to get really good insights into each and every customer’s behaviour and preferences, and can tailor a customer experience in a way that is so much more focused than any offline business could manage. Imagine trying to train, for instance, every in-store sales rep at HiFi Corporation to actually know and understand the products they are selling, and to develop the skills needed to understand the needs of every customer they deal with. Well, OK, that’s not so difficult. Maybe it is all down to management attitude after all.

Web 2.0 has played a big role in elevating online customer service. The ability to see multiple views of products, read and write actual consumer reviews, and seek out and provide peer recommendations has added tremendously to the enthusiasm with which consumers do business online. The transparency that Web 2.0 provides is a vital driver of the web as a window-shopping medium. Try to find out in-store exactly what the make, model, performance, strengths and weaknesses are of say the range of plasma TVs on the shelves, and you come away with snippets of information that may or may not be true. Online retailers encourage comparison shopping, and go to great lengths to provide extensive product information. Offline businesses often see informed customers as a threat; online businesses know that informed customers are an opportunity.

Of course, not all offline businesses do a bad job. In the US, many major stores have risen to the challenge and provide superb customer experiences. Multi-channel businesses like the giant bookstore chain Barnes and Noble have integrated online and offline services that pushed them up the Consumer Satisfaction Index to a score of 88, a little higher than Amazon.com.