"As to the first, if you're on a slow dial-up, the pop-ups are a major hassle because they use valuable bandwidth that slows the download of valuable stuff, especially since the pop-ups tend to be flash-enabled or use fairly large graphics files. As for the second aspect, pop-ups are more intrusive than pop-unders. Though at one point it seemed that pop-unders were going to be used more than pop-ups (because of the perceived difference in intrusion) I've noticed that this has now reversed. I suspect because the advertisers were worried that you just shut the browser down without ever seeing the pop-under. Internet advertising has been such a roller-coaster ride that any small disincentive is enough to tip the balance, and so I've seen more pop-ups recently."
Wharton professors say pop-ups may be relatively new, but they have characteristics not unlike those of other forms of traditional advertising. In the final analysis, all advertising is an imprecise science. No one knows with any degree of consistency how well any ads increase the sales of products and services. Sometimes they help; sometimes they don't. The better ones can create a nice positive buzz; the poorer ones can be embarrassing.
"The pop-ups that are more effective are the ones related to the site you're looking at," says marketing professor David Reibstein. "Some advertisers use pop-ups everywhere, but they may be totally irrelevant to you at the time. If I want to buy a new car and there's a pop-up of a Volvo, it's much more likely to be effective."
Marketers must find something useful in pop-ups because they continue to use them, as they do telemarketing calls. "The reason we end up getting such a large number of phone calls at home is because it's economically worthwhile to do," Reibstein says. "They wouldn't be calling us at home if it didn't pay economically. The best solution to get rid of those annoying phone calls is not to respond. But there enough people that we continue to be harassed. Pop-up ads are so cheap to do. What's it cost for me to add another million of them? It's inconsequential, so we're being bombarded. Given the cost to the provider, they're going to continue offering them. There's not an easy way around that."
Billions and Billions
Pop-ups, which cost just pennies each to put online, are ubiquitous. During the first seven months of 2002, advertisers launched some 11.3 billion pop-up-ad impressions on the web, according to "Spotlight on Online Advertising," a report published in August 2002 by Nielsen/NetRatings. Most of the pop-ups originated from a handful of advertisers: 60 advertisers accounted for 80% of all pop-ups.
According to another report by Nielsen/NetRatings -- "The State of Online Advertising," published in February 2003 -- pop-ups still represent a relatively small fraction of online ads, even though they continued to grow in use from 2001 to 2002. As of the fourth quarter of 2002, pop-ups comprised 3.5% of all online ad impressions, up from 1.9% in the year-earlier period.
"Mitigating the rapid growth of pop-up advertising is the fact that advertisers and websites have become increasingly aware of negativity surrounding the delivery mechanism," according to the report. "Some notable websites have ceased offering pop-ups as an ad solution, and a few online services have gone as far as offering pop-up-blocking software with their service."
The report added that the entertainment industry, such as casinos, used the most pop-ups as a percentage of total industry impressions in the fourth quarter of last year. Hardware and electronics advertisers were the second heaviest users of pop-ups. "One person's dream can be another's nightmare, and such is the case with pop-up advertising," the report says "Advertisers get a kick out of the extensive creative space afforded by launching a new browser window, but web surfers often find themselves playing a game of cat and mouse, chasing down errant windows."
Nonetheless, figures compiled by DoubleClick, a provider of marketing tools for advertisers, direct marketers and web publishers, show that the use of "rich media" in general continues to grow. Rich-media ads represented 31.7% of all online ads in the second quarter of 2003, up from 17.3% in the first quarter of 2002. DoubleClick defines rich media as pop-ups, dynamic ads that move across web pages and any ads that include Macromedia Flash technology.
Feedback and Choice
Schrader of Teradata would like to see marketers engage in what he calls "green marketing" -- doing all they can to clean up an increasingly cluttered online advertising environment. "Pop-up ads are like litter: you have to clean them up," he says.
Schrader also faults marketers for not using online technology to collect information on the kinds of ads consumers wish to see and when they wish to see them. Advertisers could, for example, use a simple drop-down menu on a pop-up ad to elicit comments from Web users as to what they found to be positive or negative about the ad.
"I cannot for the life of me understand why people don't use the interactive nature of the web," Schrader says. "Marketers are missing the boat in terms of not capturing the negative feedback...They're not solving the problem of getting the right ad to the right person at the right time."
Schrader is preparing to write an article about how marketers of all stripes, online and offline, must recognize that they have a better chance of success if they allow consumers to take control of the media messages that make their way through consumers' "cocoons." Website and cable TV providers should periodically ask their customers questions about which advertisements they would be interested in seeing. If providers knew a customer wanted to get more information about a possible vacation to Europe or was a fan of clothing from J. Crew, they could make sure that he or she did not see ads for trips to Las Vegas or for trousers from Sears.
"Instead of marketing people making pure guesses and blasting ads out there, consumers [should be able to create] permeable cocoons and let certain kinds of advertising through," according to Schrader. "It's good for consumers because it would be stuff they're interested in. It would also be good for advertisers; they'd spend less money reaching people with higher potential conversion rates."
