Office of the e-Envoy Web Quality Briefings One Case study of advertising on a government website (note now on back page) (c) Crown copyright 2001 The text in this document may be reproduced free of charge in any format or media without requiring specific permission. This is subject to the material not being used in a derogatory manner or in a misleading context. The source of the material must be acknowledged as Crown copyright and the title of the document must be included when being reproduced as part of another publication or service. First published 2001 email: webguidelines@cabinet.office.x.gsi.gov.uk The Office of the e-Envoy Stockley House 130 Wilton Road London SW1V 1LQ This document is available at http://www.e-envoy.gov.uk/webguidelines/index.htm Table of contents Office of the e-Envoy 1 Introduction to Web Quality Briefings 4 Case study of advertising on a government website 4 The aim of this series 4 The aim of this Web Quality Briefing 4 SUMMARY OF SUGGESTIONS: CCTA case study on advertising on government websites 5 Points arising from further discussions 6 CASE STUDY BACKGROUND 8 Procurement 8 Where to advertise 8 The technical model 8 The financial model 9 Other financial options 9 Costs to CCTA 9 Unmet expectations 10 A comparison 10 The importance of content 10 Official guidance on online advertising and sponsorship 11 Introduction to Web Quality Briefings Case study of advertising on a government website The aim of this series Web Quality Briefings contribute to ongoing debates on website quality. They review pressing issues of effectiveness for government web managers in terms of communication, presentation, costs, and procedure. The Web Quality Briefings are meant to: * Stimulate discussion within government * Pull together current research and thinking * Deal with issues that are difficult to measure or which are subject to rapid change * Have a short shelf life * Work alongside the Guidelines for UK government websites to assist government bodies * Identify processes that will help ensure quality * Eventually achieve a consensus on quality. They are produced by the Office of the e-Envoy in response to issues raised by the Government Internet Working Group. The aim of this Web Quality Briefing Government procurement is tasked with achieving value for money while maintaining propriety in both purchasing and result. For web managers this means they are asked to consider advertising and sponsorship, but within clear guidelines provided in Section 1.3 Advertising and sponsorship of the Guidelines for government websites. This Briefing raises key issues that come out of the CCTA's use of the sale of advertising space on www.open.gov.uk to offset its costs. It is intended to help clarify decisions made about how to reduce the costs of government websites. SUMMARY OF SUGGESTIONS: CCTA case study on advertising on government websites CCTA's experience suggests that web managers consider the following points: * Any advertising in government publications must not embarrass or conflict with government policy in any area: for example cigarette advertising would need serious consideration. * Any advertising in government publications must not give the appearance of being likely to influence purchasing by that body - CCTA felt that it would be inappropriate for IT, telecoms and related consultancy companies to advertise on open.gov because of CCTA's role in assisting departmental purchasing. * Content of individual ads may not be acceptable, even if the company or source of the ad is in itself acceptable. Individual advertisements must also be vetted on an ad-by-ad basis for propriety and editorial appropriateness. * Acceptability of advertisers and their content should be built clearly into contracts. * Sell the right page. Your search engine page may reach a wider audience than your home page. * If the advertisers only pay for users' clicks on the ad, some of the value of advertising - the exposure of readers to the brand and its message - will not be charged for. Some websites sell exposure to users in addition to actual clicks. This approach may yield more income. * Tendering, ongoing vetting of content and continuing invoicing of advertising will add to costs. * If you are going through a third party, ensure that you can independently validate their figures. * Examine any predictions of income very carefully. * Compare all the costs and benefits of advertising with other means of reducing costs. For example, consider the commercial value of credit given to suppliers when negotiating with them. Sponsorship raises also issues of propriety (among others), but these issues arise only once rather than repeatedly. Income or value may be more certain. Administrative costs may also be less, though costs of identifying and negotiating need to be taken into account. Points arising from further discussions COI Communications, which purchases most advertising on behalf of the UK government, also have the following recommendations: * It is a good idea to check the appropriateness of your sponsor or advertiser for the other government websites to which you link. It could be that they are in negotiation with your advertiser or that the advertiser or sponsor is in some other way unsuitable. In this age of joined up websites, issues of propriety are also joined up. * Joined-up government advertising is also an opportunity. It could be that judicious cross promotion across several important government sites might be more attractive to advertisers. As some sales houses place advertising on packages of websites, it could be that packages of government websites would have advantages for both advertisers and government. * Advertising is a particular issue for campaign websites, which are themselves part of a focussed advertising or PR effort. What is the impact of someone else's advertisement on your own campaign branding and effectiveness? Would commercial advertising detract from the message or from users' trust in the site? Do you really want to send users to someone else's campaign? * Remember that sponsorship can take many other forms as well. It could be that a site directed at a target audience you need to reach would happily publish your information with cost savings to you. * New standards for establishing and auditing the value of your website for advertising sales are being developed. Visit www.abce.org.uk (alternatively www.abce.org.uk/frameset.asp) for more information. In the future it will become more and more important to have independent auditing of access figures in order to sell space. The cost of independent auditing would be paid by you and would need to be figured into the business case for selling space on your site. * COI advise that recent changes to the market mean that advertising could be even less lucrative than this case study might suggest. While £15-£20 per thousand clicks used to be common, by July 2001 the charge per thousand clicks could be as low as £3.00. * Advertisers now want more than simple banner ads. Many advertisements are now pop-up windows or contain flash animations. This might have implications for the accessibility of your site. Such advertising may require more sophisticated tracking of users than you can supply. * Since these increasingly ambitious advertisements are supplied to your site from third party servers, your web managers may have other tasks such as testing to perform. You may need to include this as a cost in your business case. * Close scrutiny of advertising sales houses, their portfolios and their past history can give a good understanding of their likely success and the kinds of advertising that they can deliver. COI advise that sales houses now either put together bespoke packages of carefully targeted online advertising, or alternatively, sell packages of space at a low rate with the advertiser not knowing the individual sites on which the ads appear. * Online advertising is now very much a buyer's market, with advertisers interested in the main online players. According to ISBA figures from MMXI, ten sites account for 33% of internet usage and 50 sites account for 50% of usage. If you want to sell advertising, these sites are your competition. The Government Internet Working Group also points out that extranets involving third parties and suppliers may be another venue for advertising. However, extranets also present further issues of propriety. You should consider very carefully whether an advertisement from a partner on your extranet is acceptable in any of your digital media. CASE STUDY BACKGROUND During the period covered by this study 1996 to 2001, CCTA provided a portal to government online content at www.open.gov.uk. Access statistics confirmed a large readership. For example, in one week in Feb-March 2001, it provided 2.8 million successful page requests. CCTA decided to reduce the costs of providing open.gov through appropriate advertising. Procurement The decision to tender for advertising sales and service was taken in 1996. The third party supplier was selected through competitive tender. CCTA's Commercial Intelligence Service (CIS) sourced a list of players in the market. CCTA's domestic procurement unit ran the tender. Eleven companies were asked to submit proposals after receiving a specification. Three companies responded with a proposal. Of these two were asked to make a final and best offer for evaluation. At the end of the procurement, a company specialising in the sale of online banner advertising had won the contract. Where to advertise CCTA specified the size and location of the advertising. Banner ads would be located on the most visited page, the search engine rather than the home page. The commercial agency took on all financial risk themselves, in exchange for a percentage of income for sales of advertising space. CCTA were able to provide clear evidence of the number of impressions of the page that were downloaded. CCTA's clear access statistics were a factor in their being able to establish the value of the page. This meant they were able go for an option which involved less risk to them. The technical model The Contractor would run all advertising from their own server. Code on the CCTA's search page would download the different advertisements, sometimes in rotation. Users who clicked on a banner ad were then forwarded to the Contractor's servers. This allowed the Contractor to record and assign all clicks on advertising. This limited CCTA's technical involvement to loading the correct code on the page. All files including graphics were held elsewhere. The financial model CCTA paid no money to the Contractor upfront. The Contractor accepted the risk involved in relying on sales and user actions for revenue. The Contractor charged advertisers a low flat fee (typically £15) per thousand clicks that successfully resulted in a page impression being downloaded. From this revenue, the fees charged by advertising agencies and the Contractor's direct costs were deducted. The resulting income was divided on a roughly 50-50 basis between the Contractor and CCTA. Other financial options The Contractor offered an option to take on all management tasks for a flat fee (£50,000) against earnings or, for less than half that sum, a different fee charged on annual basis also against earnings. However, neither option was accepted in the end and a system of simple apportionment of the residual income used. The Contractor would send a combined report of both anticipated and actual records of the number of click-throughs (people clicking on advertisement for more information) per campaign to CCTA. On this basis, CCTA would then invoice the Contractor for the sum they were owed. Costs to CCTA CCTA made no direct payments to the Contractor for the service. Fifty pounds was the typical cost of raising an invoice. However this figure does not include the costs in staff time spent checking the Contractor's statements and raising a request for an invoice. Staff resources were also used in the briefing and selection process. Some small amounts of staff time were also spent in vetting advertisements. As the contract continued, increasing amounts of staff time were needed to consider editorial issues (see below). Unmet expectations The Contractor overestimated both the numbers of readers who would click on the banners and the demand for advertising. Their original estimate of income over the three years was, in order of year * £200K, * £250K * and £312.5K. These estimates were accepted in good faith by CCTA who at the time had no experience of on-line advertising. The contract was extended for a fourth year. During this last year, space for 23 advertising campaigns was sold. The income based on number of clicks on the ads is estimated to be about £20,000.This income then had to be split among all parties. A comparison In comparison, the search page of open.gov also gave a credit with a link to the search engine that powered the site. Again, having established the value of the page, CCTA were able to negotiate a very significant reduction from the list price for the search engine licence. This reduction in cost was worth more than all income from advertising. Web managers should be aware of the value of brand exposure of this kind and be aware that substantial discounts can be negotiated. The importance of content It is in the interest of the space seller to sell space. CCTA had to clarify the kinds of companies from whom advertising was not appropriate. This proved to be an ongoing task of some sensitivity. Advertisers with IT or telecom interests were considered inappropriate as CCTA might be at some time in negotiation with them and needed to avoid any appearance of endorsement or suggestion of influence. Other forms of advertising might be seen to be in conflict with government policy elsewhere. For example advertising for alcohol or cigarettes would be inappropriate. Examples of the companies that CCTA did accept advertising from include: * BIP Ltd * Daltons * British European * Kompass * Revolver * My Points * Expedia * Flipside * Charities Aid Foundation * Alliance & Leicester * Industrial EXM Continual monitoring of content was necessary, even when the advertisements came from even from companies who avoided this kind of controversy. A banner ad from a well known online bookshop featured a highly inappropriate book. This led to an official complaint which came via DTI. Official guidance on online advertising and sponsorship Annex J of the Guidelines to UK government Websites gives official guidance on advertising and sponsorship in government Websites. This advice is given at http://www.e-envoy.gov.uk/webguidelines. The government Information and Communication Service provides specialist advice on all aspects of communications and publicity. They provide detailed advice on the propriety, value for money and procedural criteria that must be met by every paid publicity proposal. See http//www.gics.gov.uk/handbook/guidance/giswork/index.html. The GICS Handbook gives advice on all forms of sponsorship in Annex C at http://www.gics.gov.uk/handbook/guidance/giswork/annexc.htm For further guidance on sponsorship, consult the Cabinet Office Guidance for Departments on Sponsorship of government Activities, found online at http://www.gics.gov.uk/handbook/guidance/sponsorship.htm A central Cabinet Office contact point for advice on sponsorship is 020 7276 2472. COI Communications provides sponsorship and advertising services for the public sector. For an up-to-date view of the market for online sales, or for purchase of advertising to promote your own site, contact Jamie Galloway of COI Communications on jamie.galloway@coi.gsi.gov.uk. This Briefing acknowledges the helpful participation of the Office of government Commerce. 10 11 Introduction to Web Quality Briefings 3 CASE STUDY BACKGROUND 4