Advertisers want auditors to check online ad counts

Filed under: Retail |

Advertisers now want their online clicks accounted for.

In reaction to advertiser questions, companies such as Google, Yahoo and LookSmart are working with industry groups to answer basic questions about how click-based advertising works.

Some companies including Kimberly-Clark, Colgate-Palmolive and Ford Motor Co. are demanding that online publishers hire auditors to check ad and viewer counts by the middle of next year.

Others are hiring click-trackers to investigate, because of fear of click fraud.

Click-fraud participants click ads on networks such as Google AdSense so that the sites’ hosts make more money or to try to knock a competitor’s ad off a site earlier than would be normal.

Internet advertising revenue has grown by almost 30 percent during the last three years.

Concerns about click fraud and viewer statistics do not appear to be affecting online advertising revenue right now, but ad agency executives said the issues must be resolved before large advertisers will pour much more money online.

Indeed, the Internet draws only a sliver of the total spent on advertisements. Last year, Internet ads accounted for just 4.7 percent, or $12.5 billion, of the $267 billion spent on advertising, according to the Interactive Advertising Bureau, a trade association of online publishers.

The average amount spent online by top advertisers during the first half of 2006 was 6.8 percent of their budgets.

Procter & Gamble, the nation’s biggest advertiser last year, spent $33.5 million — less than 1 percent of its $4.6 billion ad budget — on online ads in 2005. General Motors, the second-biggest advertiser, spent $110.5 million online, or 2.5 percent of its $4.35 billion total, according to TNS, which does not include search ads in its figures.

An ice cream shop on every corner?

High-end ice cream retailers are looking to be the next Starbucks.

But Marble Slab Creamery, Cold Stone Creamery and MaggieMoo’s International will have to beat out industry leaders such as Dairy Queen and Baskin-Robbins.

Americans spend about $21 billion a year on ice cream, according to the International Dairy Foods Association. That amounts to 1.6 billion gallons of ice cream, or 21.5 quarts a person annually. Almost two-thirds of that ice cream is eaten away from home.

But, is there really a niche for high-end ice cream on every corner? The companies seem to be hoping that if they build, the customers will come.

Cold Stone, founded in 1988, has 1,400 franchises in the United States, Japan and South Korea — most opened in the last five years.

Marble Slab and MaggieMoo’s also have pursued rapid growth strategies during the last five years. Marble Slab, which opened its first store in 1983, now has 371 franchises in the United States, Canada and the United Arab Emirates, with another 220 under development. Started in 1989, MaggieMoo’s currently has 190 franchises in the United States, with an additional 150 under development.

Including revenue from newly opened stores, Cold Stone expects sales to reach $465 million, up 46 percent from last year.

Marble Slab estimates this year’s sales will be $90 million, up from $75 million last year, with sales at stores open for more than a year increasing 3 percent.

MaggieMoo’s projects $50 million in sales, up from $43 million last year.

The chains are hardly hurting for franchisees. Cold Stone, for example, received 25,000 applications last year.

Trans fat ban unfair to chain restaurants

The National Council of Chain Restaurants is weighing in on the New York City Health Code decision to consider banning trans fat in restaurants.

The comments, sent to Rena Bryant, secretary to the Board of Health, were submitted as the board held a hearing about the proposal.

In its first set of comments, NCCR President Jack Whipple takes issue with both the timing and the necessity of a trans fat ban in New York.

“In its proposal, the Health Department assumes that restaurants will easily be able to replace their trans fat-containing oils and foods with a readily available supply of trans fat-free products. This is simply not so,” Whipple said. “At this point, the demand for trans fat-free oil far exceeds the supply. It will take years of working with producers, processors and suppliers to create sufficient quantities of trans fat-free oils that the entire industry can use.”

In order for restaurants to eliminate trans fat from their food, companies must undertake tremendous amounts of research and development. Although a considerable amount of effort and expense have already been invested, more work remains to be done.

In its second set of comments, NCCR addresses the proposal to amend the New York Health Code to require that certain restaurants provide prominent caloric statements on menus.

“The department acknowledges that the proposal is intended to reach approximately 10 percent of the city’s restaurants, particularly those that are ‘high volume’ establishments,” Whipple said. “There is no reason to view the calories consumed at this 10 percent of restaurants any differently from the calories consumed at the remaining 90 percent of restaurants. A calorie is a calorie. The answer is not to impose costly, unworkable requirements on all restaurants. At the same time there is not justification for singling out chain restaurants for disparate treatment.”

Joan Johnson covers retail for the Colorado Springs Business Journal.