Stephen Foley: There's hope yet that web ads will start to click again


US Outlook Internet advertising is not a bust after all. A creeping despair about the effectiveness of pay-per-click online ads has been infecting both the ad industry and those of us on the publishing side who rather hoped that online advertising would be lucrative enough pay our wages one day.

Click-through rates, the number of times a web surfer clicks on an ad, are abysmal. Advertisers are paying less for each click, too, a fact that has freaked out Google's shareholders whose fortunes rest on online ad revenues.

The reason can be found in a study by Pretarget and comScore, two research firms, out this week. It concluded that having a person clicking on your ad bares basically no relation to whether they will actually buy your wares in the end. The best measure of that, it turns out, is whether a web surfer lingers to look at your ad or hovers over it.

That means advertisers should invest in making sure their ads appear on web pages in prominent positions, and publishers might be able to charge the premium rates that have failed to materialise under the pay-per-click model.