Re: Future of Online Advertising

From: Sally Krumholz <salinka_at_earthlink.net>
Date: Tue 24 Sep 2002 09:40:11 -0500

Hi Ryan,

I see you received a few responses and wanted to add my comments as some of
the previous responses just did not jive well with me. Let me preface this
with saying that I have been involved in this space for almost 6 years - 5
years working in it directly. I was there during the boom dot com years and
have worked at an interactive agency. And some will attest to the fact that
I write and consult on interactive marketing. So I believe I speak from a
large body of experience and from observing the evolution of this pace. And
so it goes....

1.Smart Banners - Correct Definition
What Vitaly Sazanovich describes as "smart banners" are actually called
"expandable banners" by the Interactive Advertising Bureau (IAB). These are
banners that expand either by a user's click or mouse-over. Contrary to what
Vitaly says, they have been around for quite some time. Vendors such as
Enliven (now part of Unicast) and Bluestreak started this development I
believe around since 1999. In Internet time, that's a while. In the
beginning, these banners were Java-based. The creative was developed either
using a propietary tool or Shockwave (Macromedia Director). With the growing
popularity and acceptance of Flash in the marketplace, they have gained
acceptance amongst the advertising community. So much so that publishers
like Yahoo can actually create them in house if it makes sense. Current
vendors, in addition to the "founding vendors" Bluestreak & Enliven/Unicast,
now include PointRol. I am sure there are other vendors out there producing
the same elements but these are the ones I've dealt with thus far. As I
mentioned, the medium is constantly evolving.

These ad units take advantage of the growing acceptance of rich media on
publisher web sites. They allow for real time data transfer to/from the
client's database as well as allow for in banner interaction in order to
customize the user's experience. Want to see examples?

Bluestreak - http://www.bluestreak.com
Unicast - http://www.unicast.com/gallery/gallery_inpage.asp
Pointroll - http://www.pointroll.com/Products/PointRollAds.asp

2. Smart Bots
Again, the experience Vitaly was describing has also been used.
Unfortunately the contact he had on ICQ has been equated as Spam and
therefore not regarded as optimal for most traditional clients. There is one
other vendor, Active Buddy who has used chat bots to enhance customer
service or add brand value to a campaign.

3. Targeting - actually Keyword Buys
Again, the search engine experience described by Vitaly is known as a
keyword buy. Companies like Google and Overture will sell keywords in order
to increase an advertiser's placement for any run search. So if you run a
search on "flowers" you will see them come up in the search. Typically an
advertiser pays per each click through - known as a CPC. Those on this forum
who are more familiar with this tactic can speak about it directly.

4. "What is new and exciting in the world of online advertising?" you ask.
The best answer I can give you in increasing acceptance amongst traditional
channels regarding the value of implementing online campaigns. The industry
is still evolving and is learning from early mistakes. Standards are
beginning to get written, reports analyzing the impact of digital marketing
on branding and lead generation and new vendors are born and retired every
day. I completely disagree with Rickson Rodricks (if that's his real name)
comment "nothing is new and nothing is exciting." New ways of measuring and
development of standards is exciting as it didn't exist before. The online
ad community is actively discussing and evaluating the past years and making
stronger cases for themselves. While this may seem "bland" to Rickson, it's
not to me. I will admit that things like the propencity of casino ads,
brokerage companies and cost per acquisition/cost per click deals is not a
savory development for some. But like everything else in advertising, every
business has it's buyer and seller.

5. What are the various types of online ads and examples of respective costs?
Examples include: GIF banners, verticals, skyscrapers, rectangles, buttons,
pop-ups, pop-unders and exit pops. They also include rich media;
specifically: expandable banners, interstitials, floating ads, video
banners, flash ads and more. There are also text links, sponsorships, and
keyword buys. Search engine marketing and optimization would be another
tactic. Email marketing, including Flash and video as well as text and HTML
are also in the mix. Email list rentals and sponsorships would also fall
into the realm.

A realistic response as to what would be the costs is "it depends." It
depends on the site. It depends on the network representing them, if at all.
It depends on the ad units you are developing and trafficking. It depends on
the number of units you plan on trafficking. It depends on who is doing the
buying and their strengths as a negotiator. It depends on your relationship
with the seller. It depends formats you plan on using. It depends on who
your client is. It depends on how much inventory is available. It depends on
whether your are buying targeted or run of site/network. Sure, I could throw
numbers out there but it wouldn't do the buyers or the sellers any justice.
Costs include NOT ONLY the cost of buying the media but development time as
well. Let us not forget that as it affects you overall media ROI.

6. Online advertising revenue was supposed to be a goldmine for business?
What has occurred?
Goldmine? Fool's gold if you buy into that theory. Advertising is a
BUSINESS. Like any business, it has it's ups and downs. Right now, it's
going through a shift. At one time there were loads of cash heavy "dot
com's" throwing money at publishers to increase traffic to their sites. They
and some of their foolish models went "poof" as they should have. During the
boom time, if you want to call it that, ad rates were high and sometimes
bloated. If you know economics, it boilded down to supply vs. demand. There
was little supply and a lot of demand so many was to be made.

Now as things have shifted, traditional advertisers like consumer goods,
pharmaceuticals, financial services and automotive are beginning to
advertise online and benefit from all the mistakes made in the early days.
Sure, there are fewer dollars out there but it's a buyer's market.

The introspection as described by Rickson has more to do with shifting
viewpoints. For a long time interactive marketers tried to tout the online
realm as something completely different. Now it's begin touted, and
correctly so in my opinion, as a seperate or complimentary advertising
channel. For some advertisers it has merits. And for some it may not. Online
tactics depends on their strategy, demographics and objectives.

7. What does the future hold?
I don't have a crystal ball but I believe there will be increased acceptance
of digital marketing amongst traditional advertisers and agencies. Growth
will be determined by the quality of the venue and tactics used, as well as
market conditions. Rather than predict, observe. Many of the pundits who
attempted to hypothesize about the "next best thing" fell flat on their
face. However look for more targeting and measurement/analytics to come into
the fold.

Each market has it's own rules and needs. Look at your market and determine
what is happening.

8. What actions are consumers taking on their desktops to filter advertising?
Pop up killers and Spam filters are growing in use. However the percentage
of consumers who employ this is still relatively small with respect to the
entire online population. Growth in filtering is higher amongst corporate
browsers due to bandwidth restrictions. While these might strike fear in the
hearts of some advertisers, the impact of these filters is minimal. In fact
if anything will change, it will be an increased senstivity to consumer's
privacy and tightening of spam restrictions.

Again, there are LOADS of resources out there. I suggest you evaluate them
and determine on your own the trends. Look at the past and present as cues.
And look to the industry resources available to you online. What I wanted to
caution you on is getting misinformation. Everyone has an opinion but let's
just make sure it's based on fact -- not just what you think is "cool."

Good luck.

Sally Krumholz


~~~~~~~~~~~~~~~~
sally krumholz
interactive marketing consultant
salinka - gotham city
home: (212) 362-9638
mobile: (917) 362-1309
email: me_at_salinka.com
web: http://www.salinka.com






Received on Tue Sep 24 2002 - 09:40:11 CDT