'HYBRID ADVERTISING' SET TO BECOME CORNERSTONE OF INTERNET AD CAMPAIGNS The banner is dead. That's the word from online advertising and marketing agency, Panlogic. With banner click-through rates now down to an average of 0.36% (source: Nielsen Netratings) and Internet advertising space growing exponentially, will UK Marketing Directors continue to spend their hard-won budgets on the thus far unproven area of Internet advertising? At the very least they will be expecting a dramatic drop in online media costs - particularly away from high-traffic portals and ISPs. Panlogic is the first UK agency to respond to this situation. Today sees the launch of its new 'hybrid advertising' service, in a move that will see the agency make a significant addition to its use of the traditional online advertising model. Traditionally agencies have paid a fixed cost for purchasing a fixed amount of advertising space in the online environment. The agency then earns commission from this activity. The client receives little benefit other than the hosting of the ad in cyberspace and some increased traffic to the client website. The new model is based on the power of partnership rather than purchase. Instead of simply purchasing a fixed amount of space for a fixed price, an affiliate relationship is established with the target website. Media buying costs are cut dramatically, since the website earns commission on the commercial success of the ad. In place of relying on revenue generated by the sale of the media space, the site takes a stake in the success of the ad itself - taking commission on sales or registrations generated by it. The move has been enabled by the development of cutting-edge software that enables Panlogic to track and measure affiliate relationships - the cornerstone of the hybrid model - as never before. The movement of each and every visitor to a website can be tracked in the finest detail - where the visitor goes, what s/he does, buys and is interested in. Furthermore, it enables Panlogic to manage the affiliate relationship extremely tightly - commissions, for example, can be tiered, so that different rates are paid out for users who simply click-through, perhaps register, and at the end of the spectrum, make a purchase. This means that incremental rewards are offered to the partner site for each transactional stage - essentially offering the site higher benefits the more commercially beneficial the ad is. Commenting on the launch, William Wemyss, Director at Panlogic said: "We have the deepest conviction that this model is the future of online advertising. For the first time online advertising will be commercially accountable, and will be judged on the revenue it generates rather than the crude evaluation provided by click-through rates. The lower media costs that are inherent in the model also mean that using online advertising as an awareness-raising exercise is now economically viable - this has not previously been the case." << BACK