When you finally get to the point of having a Web capable of closing a sale, or at least motivating someone to pick up the phone and buy, you’ll want to begin experimenting with ways to pull new prospects to your site.

Users searching for “banks” or “banking” on Yahoo receive this advertisement from Intuit (7/3/97).

Just by being on the Web you already benefit from one of the most powerful business-generation tools ever invented, the “Internet search engine” (Lycos, Excite, Yahoo, AltaVista, InfoSeek, etc.). Users simply type your company’s name (with multiple words in parenthesis) into the search engine and usually your Web address will be shown prominently in the results.

But those people are already your customers. What about reaching prospects where you are not “top of mind?” Searching on bank and yourtown will likely result in thousands, or hundreds of thousands of Web addresses. For example, “bank” and “San Francisco” returns a million Web pages in AltaVista’s simple search mode (10,000 in advanced search mode.)

And as more and more financial institutions, brokerages, and miscellaneous purveyors of financial information go online, it will become even harder to attract the random prospect via the search engines. (Note: Search engines are evolving and will eventually be able to better sift through the millions of Web sites. For instance, users will be able to search just the Webs of federally insured depository institutions.)

But you don’t have to be lost in the crowd. All the search engines allow companies to sponsor keywords and run general advertisements. And you can target your ads with more precision than any other medium since the search engines know precisely what is of interest to their users at a given moment in time (after all, you pretty much give yourself away when you type “New Orleans” and “restaurants” into a search engine).

The cost of advertising on search engines ranges from about $15 per thousand impressions (CPM) for run-of-site ads (appearing wherever space is available) to $50 or more for more targeted campaigns. For instance,
XYZ Bank could design a campaign so that its ad appears only when someone searches for “bank,” “credit,” and/or “mortgage.” But don’t expect to be billed $25 for the 500 people who searched on these keywords. Monthly minimums apply to most keyword ad buys. For example, Lycos has a $500 per word minimum, InfoSeek a $1,000 monthly minimum. But everything is highly negotiable when it comes to Web advertising, so you may find considerable flexibility on monthly minimums, especially if you sign-on for a long-term commitment.

Online advertising activity is not limited to just search engines, though their share of total Web advertising is estimated at 30-40%. As advertisers clamor for even better targeting, new advertising models are unfolding. DoubleClick is a leader in this area using tracking technology, cookies, to allow advertisers more precision in who they deliver banner ads to. Cookies are generally used to track users as they move through your Web site and when they return later. Blasted by some as an invasion of privacy, cookies actually capture very little private information. Even so, Microsoft and Netscape are working on standards to give users more control on of this aspect of their Web browsing, so the controversy should abate down the road.

DoubleClick, which charges $10-40 per thousand impressions, uses cookies in an ingenious way, at least from the perspective of the advertiser. An ID number is assigned to users when they visit any site displaying DoubleClick advertising (e.g., AltaVista, Quicken Financial Network, InvestorsEdge, The Dilbert Zone and Travelocity). As they move through the sites, data is gathered on what ads they have seen and which they have responded to. The data is then used to target individual users with banner ads they are more likely to find interesting, and to filter out ones they’ve already ignored three or four times (research shows click rates drop dramatically after two or three views).

DoubleClick also enables advertisers to target specific geographic areas and/or places of employment. By comparing user information to their own database, DoubleClick was able to develop a campaign for 3M Visual Systems’ $7,000 multimedia projector targeted to software, media, advertising, publishing and training companies. The campaign achieved a “click-through rate” (number of viewers clicking on an advertising banner) three times higher than the typical 2-3% experienced industry-wide. In another campaign, IBM used DoubleClick to target ads to Web users dialing in from specific university domains: “There is life after Boston College,” one ad read. “Click to see why.” That campaign garnered first-viewing click-throughs of 5-30%.

Another way to reach a geographically targeted audience is by advertising on online newspapers. The NPD Group, an international market research company based in Port Washington, NY, released a study in April which found that 40% of Internet users “frequently” read a newspaper online. Other than the larger papers, such as New York Times or Wall Street Journal, most people reading online local news probably have some connection to the geographical area. It makes sense to test ads in any online venue serving potential prospects in your target markets. And don’t give up if your test results are initially disappointing. Go back in six months to see if the cost dynamics have tilted in your favor (either due to lower CPM, different readership profiles, or both).

The RealMedia Network bundles local newspapers (and some other content providers) into a single purchase point for advertisers. By purchasing ads on those papers in, say, eastern Pennsylvania, a bank can do fairly precise Web advertising. Mellon Bank is among those companies which have advertised through RealMedia.

Determining how to get maximum benefit from your online advertising budget is no easy task. Even comparing asking prices, or rate cards, isn’t easy. Most Web publishers charge advertisers per impression or exposure, the number of times your ad is seen. And the largest publishers offer numerous advertising plans, from “run of the server” to key positions such as home page, business page, etc. Long-term commitments carry hefty discounts and monthly minimums may apply. A few will accept advertising on a per-click basis, meaning you only pay each time a user clicks on your ad. While advertisers prefer per-click pricing, most Web publishers are resisting this billing practice, arguing that the creation of compelling banners is not within their control. In any event, make sure it’s clear exactly what you are buying up-front.

While you’re at it, ask for detailed logs. Many sites provide weekly or monthly traffic summaries which include information, such as number of impressions, number of click-throughs, which of your ads performed best (rotate banner ads frequently to avoid burnout), and the domains (e.g., aol.com) of those who saw your ads.

Outside a few heavily trafficked Web sites that command premium rates, there is still far more Web content seeking advertisers than vice versa. So you may be able to write your own ticket in the short term. Financial services advertising is expected to become a large market for Web publishers. Their desire to get a foothold in that market can work to your advantage negotiating an initial ad buy.

Buying ad space in cyberspace is at least as complicated as traditional media, so you are probably best off using an agency. There are a number of specialists cropping up that concentrate solely on Web advertising (e.g., Website Promoters Resource Center, www.wprc.com) or your current media-buying agency can probably do the job. Agencies may be able to negotiate better rates, and since they earn a discount directly from the publisher, your costs could even go down.