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Will the Internet Become a Significant Advertising Medium?

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from: Rishad Tobaccowala
to: Robin Hafitz

Already a Significant Medium

Posted Monday, Jan. 13, 2003, at 12:41 PM ET

Who are these people?

The Internet is already a significant advertising medium. With $3.8 billion in ad spending—as measured by Competitive Media Reports—in the first nine months of 2002, it is already larger than outdoor media (like billboards) and has attracted nearly two-thirds as many dollars as radio.

And we have not seen anything yet.

In the next 1,000 days the Internet will attract more advertising dollars than radio, newspapers, and consumer magazines, lagging behind only television, albeit by a large margin. It is likely to significantly impact the future of television as Internet Protocol technology spreads to set-top boxes and will increasingly be used seamlessly with television to create new marketing media and opportunities.

All this from a sad-sack medium that has been associated in the past two years with hype, disasters, bogus operators, financial meltdowns, negative press, and greed, and whose biggest fans are still mired in a blend of depression and regret.

IP-based media will become a significant part of the marketing and media mix because it has something more powerful going for it than the hopes and boasts of its believers.

It empowers people.
It improves more rapidly than any other medium.
It is taking over the guts of other electronic media.

Internet-based media is the first addictive medium since television. There is a strong correlation between the number of years one has been using the Internet and the variety of tasks one does and the amount of time one spends with the medium. Today the average user is online for eight to nine hours a week, more than double that of three years ago. Average time spent using the Internet is already twice as long as time spent with magazines or newspapers. A common theme behind this increase in usage is that people feel empowered via increased convenience, control, and communication provided.

AOL and MSN introduced the 8.0 versions of each service, and we are on the sixth release of Netscape and IE browsers. No other medium is evolving so rapidly. With the recent escalation in broadbrand uptake (100,000 new homes a week), we are seeing the medium being used for entertainment and not just communication and information. A harbinger of things to come for online advertising can be seen at ESPN.com, where 80 percent of users have broadband connections and where the property has built a host of new opportunities for marketers.

This rapid Darwinian improvement of IP-based media also has impacted advertising. While "click through" and other "Blodget IPO" measures of inconsequence have declined, the ability of online marketing to attain a variety of objectives has improved significantly when implemented correctly (and often in tandem with other media). A variety of new products from paid search, to surround sessions, to larger ad units, to richer media have led to enhanced results for advertisers. The Online Publishers Association recently announced that many members are seeing 30-plus percent increases in online spending.

Increasingly, IP-based media is influencing and often taking over the guts of all electronic media and advertising. Clients are beginning to use online advertising in tandem with offline, not only as a complement to their offline dollars but also to learn how to better measure and target the rest of their advertising. As many worry about the inevitable spread of personal video recorders, they are realizing that Internet advertising will allow them to learn about ways to better measure, better innovate, and better align with consumer passions when the 30-second commercial grows less important.

For these reasons not only will internet advertising be a significant medium but one that grow more impactful, important, and influential.

dialogues
entries
123456
from: Rishad Tobaccowala
to: Robin Hafitz

Already a Significant Medium

Posted Monday, Jan. 13, 2003, at 12:41 PM ET
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Rishad Tobaccowala is president of SMG IP, an operating unit of Starcom MediaVest Group, which is one of the nation's largest communication companies. He has been selected by Time magazine as a leading marketing innovator and been elected to the Ad Age Interactive Hall of Fame. Robin D. Hafitz is co-chair of Mad Dogs & Englishmen, an award-winning advertising agency with offices in New York and San Francisco. She co-chairs the American Association of Advertising Agencies' committee on account planning, and serves on the board of the Account Planning Group US.
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Remarks From The Fray:

The problem with Internet advertising, and what will continue to drive ad money away, is that the Internet makes it too easy to check your results. Most advertising is ignored by most people most of the time. Technology lets us quantify this to a depressing degree, so you can see that, say 99.5% of the people who see your ad completely ignore that.

Print mags should be grateful that advertisers can't check up on them like that.

-- boog

(To reply, click here.)

Idealistic hopes for the potential of the Internet as a "pull" medium will probably have to stay on the back burner for a while. Virtually all of the new Internet ad technologies I've seen have been devoted to coming up with new and more intrusive ways to get unwanted messages to people who don't want to hear them.

ONE: Kazaa now "features" obnoxious audio ads that will cut into the middle of your (admittedly pirated) music selection and shout "Hey! Click over here!" at a decibel level 50% higher than the average jet.

TWO(A): The authors of crap SPAM e-mails have honed their understanding of psychology to a razor's edge, and are actually getting quite good at disguising their crud as messages you might want to have a look at. My personal favorite (the first SPAM to take me in since college) was perfectly disguised as a "message undeliverable" error notification from a mail server.

TWO(B): Perhaps even more alarming, mainstream companies like (inter alia) Crest and J.C. Penney have gotten into the game, sending SPAM out under their corporate trademarks. Given the resources available to corporate America, this toe in the water could quickly turn into the internet equivalent of Leviathan sunning himself in your 3 year old's backyard wading pool.

THREE: That impossibly annoying Qwest T-Rex ad spawned a whole phylum of progeny. Proliferating beyond reason, they all have this in common: they're designed to force you to actually pay attention to them in order to figure out where you need to click to make them go away.

Sure. . . psychoexgirlfriend.com, Napster, All Your Base Are Belong To Us, Odd Todd, Libby Hoeler, and the Theban Mapping project are examples (of varying legitimacy, desirability, and effect) of the power of "pull" advertising to create "viral memes" that can suffuse the whole of culture damn near instantaneously. Any actual products attached to these sites would have been overnight sell-outs (yes, the play on words is intentional). . . unless, of course, the lack of crass commercialism is what made these sites so popular to begin with. (Well. . . okay . . . Napster and Libby Hoeler need no explanation; for the rest, then).

Long-Awaited Conclusion

What seems to be coming down the pike is an interesting mix. People's resourcefulness in detecting, avoiding, and retaliating for (see, e.g. my riff on the CloudMark idea for a humble proposition) crap Webvertising is on the rise; but people's vulnerabiliy to clever, noncommercial memes is at an all-time high.

Maybe we're going to see an age of advertisers evocative of the famous french "precious" movement, which held it unimaginably vulgar to say "chair" when you could say "place of half-repose", or tell someone that "It is night" when you could instead regale them with the intelligence that "the curtain of the sun's long dreaming has been drawn across the firmament of aster."

Who the hell knows? Speaking of transiently invincible memes, where's Suck.com when we need them? No doubt THEY could explain the whole schmeary mess to us in a heartbeat.

I dunno. Y'All THINK I'm selling half-arsed Internet commentary here. . . but I'm really selling shotguns! Star Poster hunting season starts in 5. . . . herbal viagra. . . . 4. . . . . Teens + Farm Animals = :-). . . . . 3 . . . . Let US Refinance your house!. . . .. 2. . . . Shotguns are available on e-Bay . . . . .1. . . . . I'm tied to a chair on the outskirts of Memphis. . . .

0.

-- Thrasymachus

(To reply, click here.)

Internet advertising didn't fail! In fact, it succeeded beyond anyone's wildest imagination. It singlehandedly proved that advertsing itself doesn't work anywhere near as well as anyone in the industry would have you believe.

-- Truthteller

(To reply, click here.)

But fundamentally, it's boring to listen to advertisers talk about the internet. To them, it's all a question of eyeballs... where will they pool, and what can we do to them when they get there? I suspect that the guess that, from an advertising perspective, the internet isn't particularly different from any other medium is likely true. Which is why it's tragic to participate in the internet from an advertising perspective.

They could at least be discussing INTERESTING episodes in the history of Internet advertisement (like the "game" that came out in advance of the movie A.I. which turned into one of the most oddball and stunning testaments to the crazy potential for new behaviors that I've ever seen)... not the virtue of "pop-up" ads vs. "lie-down" ads...

-- Geoff

(To reply, click here.)

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