UK Net advertising gets underway

Ever since the Internet's transformation from a sleepy academic network into the slick and user friendly gateway to the future, the sentiment expressed by most corporations has been: "Nice idea but how do we make money out of it?"

Now the newspaper industry is gearing up to sell advertising on the Internet and is busily trying to organise itself for this new commercial market.

Last week two organisations sprang up in the UK to cater to classified or small ads on the Net.

Classified Link UK will offer regional and national press the opportunity to collectively publish their classified advertisements on the Internet. The venture is backed by Rupert Murdoch's News International and the UK Press Association.

The second organisation, called Net.tv, is headed up by the ex-chairman of the BBC, Marmaduke Hussey. It will offer a similar service, but will be backed by the Telegraph Group, United News and Media, Financial Times' parent company Pearson and Loot, a classified advertising newspaper serving the London area.

Meanwhile, the organisation responsible for circulation figures for publications sold in both the US and the UK, the Audit Bureau of Circulation or ABC, is currently developing software that will verify the number of pages downloaded from an Internet site. This will be released by the end of the third quarter, according to the ABC.

Now that many of the newspapers believe that they are just past the experimental stage of interactive publishing they are looking to derive revenue from their services. Both the Financial Times and the Wall Street Journal Europe relauched their interactive editions in the last few weeks. And the Times and the Electronic Telegraph are continually developing their services.

"We have just finished experimenting with our service," says Ann Defries-Porter, head of strategic planning at the Telegraph Group. "We are now in the first stage of commercial activity and there needs to be a great deal of work done both by us and by the industry as a whole before advertising sales can take off," she says.

What words do you use?

There is no agreed vocabulary for the service offered by interactive publications, according to Defries-Porter. It is difficult to define what sales people are talking about. For example, does a hit on an Internet site mean that users are downloading the page or just hopping on to the next page?

"In print advertising we sell space by the single column inch, but how do you sell Internet ads?" says Defries-Porter. "In an industry that has always sold advertising by the printed publication how do you sell advertising on an Internet site that can be updated four times daily?"

Online newspapers are approaching these problems in several ways. Rather than selling space they are selling time, so for instance the Times divides the day into four advertising slots, one slot for each online edition. It then quotes rates for positions such as the front page, general news or features and also for the time of day. Because the Times is a morning paper, advertising from 8:00 AM to noon is more costly than advertising later in the day.

Agencies are on the whole happy with the arrangement but want more assurances that they are reaching the audience they are trying to target. And, they are concerned that the vendors of these new media should become more accountable.

"Obviously we want our interactive advertising campaigns to be functional," says Nigel Sheldon, head of interactive media of the advertising agency, J Walter Thompson. "If we are going to advertise, we have to be happy that there is a pertinent readership," he says.

Sheldon also welcomes the ABC's entrance to interactive media. "Advertisers are a very sophisticated animal. If you look at the TV, print and radio media there is an enormous amount of demographic information available. Now that Internet users are no longer just the young and technical, we need to encourage more demographic research," he says.

The ABC will also fulfill this function. "At the moment we only do research into the demographics of business-to-business titles," says Richard Foam, deputy chief executive of ABC. "However people are no longer asking if we are getting involved in the Internet but when," he says.

First of all though, ABC has to verify Internet page readership. "We are currently developing the software," says Foam. "But the software will be designed to verify the number of registered users as well as the number of visitors to a site," he says. Then ABC will introduce an email-back service which will email people logging onto a site and ask them to complete a form. "The exact details of this initiative are not finalised yet," says Foam "But we expect to be able to make announcement later this UK summer."

There's money to be made

Despite the many problems that have to be addressed, many newspapers are beginning to derive substantial revenue from their interactive editions, according to sources at the Electronic Telegraph and the Wall Street Journal. The Wall Street Journal is charging advertisers between US$15,000 and US$20,000 per interactive advertisement a month.

"Interactive advertising works perhaps better for publications like the Wall Street Journal and the Financial Times because we have a fairly homogenous readership across the world," says Kent Hawryluk, interactive sales manager for the Wall Street Journal. "So at the moment we do not target the reader. But I think that some ad agencies will require that we target a certain demographic," he says.

Indeed as the publishing industry starts to make money from advertising they in turn will demand to know what audience they are reaching and whether or not the audience is one that advertisers wish to target. However, according to Nigel Sheldon, one of the real advantages of this new medium is that advertisers will soon be able to devise new ways of advertising--for instance, they could pay for the number of visits to their home page generated by a given publications.

But Sheldon warns in order to achieve this the industry must organise itself so that advertisers can be sure that the information they are getting can be independently verified.

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