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Floating Ads

If you h­ave ever been to a Web site that uses them, you know what "floating ads" are. These are ads that appear when you first go to a Web page, and they "float" or "fly" over the page for anywhere from five to 30 seconds. While they are on the screen, they obscure your view of the page you are trying to read, and they often block mouse input as well.

A screenshot of a typical floating ad for a Norton product: This ad is completely animated, with four or five moving parts. The ad plays for about 15 seconds. Note that it does have a "Close" button, so there is a way out of this ad. Many floating ads do not have this feature.

This page has been set up so that a floating ad should appear every time you load the page. If you have the right browser combination, then you should have seen the ad when you clicked into this page. The ad is about 5 seconds long. It floats over the page and then should settle in the upper right hand corner. If you would like to see lots of other examples of different floating ad campaigns, see UnitedVirtualities.com and EyeBlaster.com.

Floating ads are appearing more and more frequently for several reasons:

• They definitely get the viewer's attention. They are animated. Many now have sound. Like TV ads, they "interrupt the program" and force you to watch them. They can take up the entire screen. Therefore:
• From a branding standpoint, they are much more powerful than something like a banner ad or a sidebar ad. They cannot be ignored.
• They have a high click-through rate, averaging about 3 percent (meaning that 30 people will click through for every 1,000 impressions of a floating ad).

The high click-through rate, as well as the greater branding power, means that advertisers will pay a lot more for a floating ad -- anywhere from $3 to $30 per 1,000 impressions depending on the advertiser and the ad. Because they can pay a lot of money, Web sites are willing to run floating ads.

The only problem with floating ads is that they annoy people. Some people become infuriated by them, and will send death threats and three-page-long rants via e-mail. That is why you do not yet see them everywhere.

The annoyance problem points out something interesting about advertising, however. When pop-up ads first appeared, they bothered lots of people and you did not see them on very many sites. After a while, people got used to them and stopped complaining, and now pop-up ads can be found on tons of sites.

Television provides another useful example. If television programs were ad-free today, and suddenly a TV station were to start running eight minutes of advertising every half hour right in the middle of programs, people would go NUTS! There would, quite possibly, be riots in the streets. But since we are all familiar with TV ads, they don't bother us much. In fact, during the Super Bowl, the ads are a big part of the show!

As people get used to floating ads, they will become more common.

Unicast Ads

Unicast ads are a wh­ole different animal, and they are spreading across the Web as a way to get serious ad clicks. A Unicast ad is basically a TV commercial that runs in a pop-up window. It is animated and it has sound. The ads can last anywhere from 10 to 30 seconds.

If you would like to see examples of ads from Unicast, go to Unicast.com.

A Unicast ad has roughly the same branding power as a TV commercial. However, a Unicast ad offers something that TV ads cannot -- the ability to click on the ad for more information. And people do click on them at an amazing rate -- a 5-percent click-through rate (50 clicks per 1,000 impressions of the ad) is not uncommon.

Because Unicast ads have branding power and because people click on them, $30 per 1,000 impressions is a common rate paid to Web sites. Because they pay so well, they are likely to spread rapidly.

Other Variations

You are likely to see many other variations on the theme as time goes on. Here are seve­ral examples:

• HowStuffWorks offered something called a "takeover campaign" a while back. Viewers visiting HowStuffWorks saw a large ad when they first came to HowStuffWorks each day, and then they saw the message reiterated throughout the site in banner and sidebar ads. The advertiser essentially "took over" the site for one or more days. The approach worked very well as a branding play because the brand was visible to viewers throughout their entire visit to the site. Click-through rates were very high. Advertisers were pleased with the results, and negative reader reaction was minimal because everyone was familiar with banner and sidebar advertising.

   

• CNN has experimented with streaming sidebar ads, as shown here:

A small video ad appears in the right sidebar on this CNN page, with sound, and plays for 30 seconds. The reader can control the ad with the three buttons (Play, Pause, Stop) underneath the ad.

• Pull-down banner ads have appeared on some sites. Their operation varies depending on the site. On some, when you mouse over the banner ad, it expands to fill much of the page. On others, the banner ad is expanded-size initially, then shrinks to normal size after several seconds. Here's an example of one that shrinks after several seconds:

   

  When you first enter the page, the banner ad is large...

   

   

   

  ...and then shrinks to a normal size (note that this site is using oversized banners at 725x70 pixels, and the width of the site is built around its banner ads). Buttons on the ad let you re-expand it if you choose to.

   

   

All of these different ad formats are trying to find combinations that give advertisers what they want -- high click-through rates and branding power. In return, advertisers are willing to pay Web sites for running these ads because the ads work.

Multiple Web Ads: How Bad it Can Get

This page could ­be set up to give you a barrage of advertising:

• There are multiple banner and sidebar ads.
• Imagine that there are two or three pop-under ads.
• Imagine that there is a floating ad.

If there were a Unicast ad playing over the top of it all, that would be a worst-case scenario. It is hard to imagine a Web page having much more advertising than this.

I have never seen a Web site go this far, but some get close. The reason you see things like this is because it pays well. A Web site can, in theory, make between $40 and $50 per 1,000 impressions if every page were loaded with this much advertising. That is a lot of money. On the other hand, this much advertising tends to turn readers off.

An Example 
So why do Web sites end up running so many ads like this?

Let's create a hypothetical Web company and use it as an example. The company is called XYZ, and it is a small, successful content site. Here are some of its parameters:

• The company has 1,000,000 visitors a month who read, on average, eight pages per visit. So there are 8,000,000 page impressions per month.
• The company has 10 employees, with an average pay of $40,000 per year. Some make more, some make less, and $40,000 is about the middle. That means payroll is about $36,000 per month (when you add in the 8% employer match for Social Security and medical).
• Benefits per employee run $400 per month, or $4,000 total per month.
• Office rent is $4,000 per month.
• Equipment leasing and bandwidth to run the Web site is $4,000 per month.
• Other costs include phone lines, power, office furniture and computers, legal/accounting fees, travel, advertising, coffee, subscriptions, blah, blah, blah. Let's say it averages $20,000 per month in "other costs."

XYZ therefore spends $68,000 per month.

If XYZ places banner ads on its 8,000,000 pages per month and gets 50 cents per thousand impressions, it makes $4,000 per month. Obviously, that isn't going to cut it -- $4,000 per month does not even cover one person, or the bandwidth and equipment.

If XYZ is able to sell floating ads or Unicast ads at $30 per 1,000 visitors (not page impressions -- visitors), then the site's 1,000,000 visitors per month can generate $30,000 per month. That, plus the banner ads, gets the company to $34,000 per month. You can see that there is still a problem -- XYZ is only halfway to breaking even. But $34,000 is much better than the $4,000 that banner ads alone would generate.

Keep in mind that there is no guarantee that XYZ will be able to sell all of its ad inventory. It would take a very good sales person (or sales force) to find companies to sign contracts and pay for all of that inventory (8,000,000 banner ad impressions per month, 1,000,000 Unicast impressions per month). There is no guarantee, for example, that XYZ can find companies to pay $30 per 1,000 impressions for 1,000,000 floating ads or Unicast ads. If XYZ is able to sell ALL of its inventory, it is extremely lucky, so getting to $34,000 per month every month is a long shot.

XYZ therefore needs to find other ways to make money. If XYZ now:

• adds in sidebar ads
• adds in 250x250 ads in the middle of articles
• adds in pop-under ads
• adds in one or two other ad features

...then the company might be able to bring in another $15,000 per month, and it is getting close to its goal of breaking even.

That kind of math is exactly why you see so many ads on Web sites today. It's either:

• Lots of ads
• Switch over to subscriptions (and hope that you can get 50,000 people to subscribe -- no easy task)
• Go out of business

A Web site is a business, and it must cover its expenses to survive.

For more information on Web advertising and related topics, check out the links on the next page.