A few excerpts from the Interactive Publishing Alert, and other sources.

AdTech '96: Is Banner Advertising Dead ?

While it may be premature to write the obituary yet, banner advertising onthe Web is clearly in trouble.
The reality is the vast majority of Web addollars are ending up in the pockets of a small group of big players, primarily search engines and directories.
Like it or not, it's a buyer'smarket out there, and the chances of a small to mid-sized Web publisher floating his boat by selling banner ads are about as good as the neighborhood basketball star's odds of getting drafted by the NBA.
Web publishers that don't draw the 230,000 visitors a day that ESPNET SportsZone does need to step back from the current click-versus-impression debate and recognize that they may not be able to sell much banner advertising at all. Instead of trying to stand their ground and "just say no" to free trials, soft-dollar link exchanges, and clicks-only payment schemes, publishers need to pursue alternative advertising models capable of bringing in revenue today.

Publisher's View:

Vin Crosbie of Freemark Sounds Off "Web newspapers hope that appreciable circulation can be built and maintained, and attract advertisers and possibly paying subscribers, on those assumptions.
Such hopes and assumptions seem over reaching. A number of technosavvies might change their habits and expend their time to access these services, but generic behavioral data indicates that the general consumer population, who are increasingly used to passive and effortless consumption, who are used to delivery to them, won't."

IPA Testlab:

Newsweek Interactive (America Online) Summary:
Having recently moved from Prodigy to America Online, Newsweek Interactive has done a superb job of maintaining the magazine's print identity online.
The earlier work that Post-Newsweek New Media, Newsweek Interactive's parent company, did with laser and compact discs has paid off, and the online service offers a unique magazine look-and-feel that is easy to navigate.
Unfortunately, Newsweek Interactive lacks the daily punch needed to keep visitors coming back; it's also in desperate need of content unique to its online publication. Currently, the only value-added the online edition offers print subscribers is the opportunity to flame one another on the Let's Talk and My Turn Online message boards.
True, the AOL site is barely a month old, but Newsweek has been working the medium for some time and readers deserve to see more than simply an electronic repurposing of the magazine's printed product.
That said, Newsweek certainly seems to have its advertising model down pat.
Newsweek Interactive boasts buttons from big-name advertisers like Microsoft, Federal Express, Honda and Lexus and expects to turn a profitby next year. Thanks to tracking technology provided by America Online, the magazine will soon be able to give its advertisers reliable data on the readers who visit its site. Armed with that information, Newsweek Interactive intends to roll out an aggressive ad campaign designed to justify its rates while demonstrating success to potential advertisers. And Newsweek does notintend to limit its online publishing activities to America Online; an advertiser-supported Web site is on the way.

Publisher's View:

Q&A with Peter McGrath, Editor of New Media, Newsweek Interactive:
We intend to maintain advertiser-supported sites because:
1. ad sales is acore competence of Newsweek and
2. the online environment offers opportunities to do new and creative things with advertising and transaction processing.

Some Independent Observations

• The Online Advertising Market is Real
• The Online Advertising Market is Growing
• Advertising is Arriving a Little Slower than Expected
• 60%+ of Spending is Going to 20 Top Sites
• Agile and/or Well Funded Competitors Are Moving FAST

Questions About Banner Ads on the Internet

By STUART ELLIOTT -- New York Times - December 3rd 1996

One particularly popular activity in the realm of interactive media has been banner-bashing.
Banners --- tiny display advertisements that are the cyberspace equivalent of billboards --- have been roundly condemned as boring and ineffective because of their size and usually prosaic nature. But a new study from Hotwired, the Internet media service of Wired Ventures, concludes that banners perhaps ought not to be considered the Rodney Dangerfield of interactive advertising. The study, conducted by Millward Brown International, a marketing research company, finds that banners influence the attitudes of computer users because they make measurable advertising impressions, which can help build the brands being advertised. The efficacy of banners is only one of many issues concerning advertisers as they become further involved in -- and spend more on -- interactive media. According to the Hotwired advertising effectiveness study, banners are not unlike television and radio commercials in their ability to stimulate awareness of and affinity for a brand, as well as purchase intent, though the reaction is somewhat more passive than that elicited by a television spot. And the impact of a banner may be restrained by any negative predisposition toward a brand on the part of the consumer exposed to it.

A Comprehensive Analysis of Ad Response

a study by Internet Profiles (I/Pro) and DoubleClick Network

In October 1996, a study by Internet Profiles (I/Pro) and DoubleClick Network, entitled 'A Comprehensive Analysis of Ad Response,' claimed that Internet users click on 2.11 percent of all ad banners displayed, while direct mail typically generates a 1 percent to 2 percent response rate, and print ads 0.5 percent to 0.75 percent.