ONLINE-ADS>> 1:1 marketing on the 'net and otherwise

Andrew Forbes (andrew.forbes_at_redbridge.com)
Mon, 15 Sep 1997 13:23:26 -0400

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I've been intrigued by the recent increased visibility
of PowerAgent, and decided it was time to get my
two cents worth in.

I did contract work for Tele-TV (the joint Bell Atlantic/
NYNEX/ PacTel interactive television venture) for
several years, and back in '94 was prototyping
systems to present targeted television ads to
Stargazer customers. I learned two lessons from
this effort:

1) Full up "real-time" targeted advertising is tough
to do well e.g. so that it is scaleable and has three
nines or better of availability.

2) It is expensive to do (some of you may be familiar
with the amount of money that passed through
Tele-TV).

So how does this apply to the targeted Internet ad
discussions that take place on this list?

It does not matter many times I run the numbers
for a targeted Internet advertising business plan,
I cannot get the "after daily operational expenses"
revenue number to exceed $1 per subscriber per
month. Out of this a company is going to pay for
R&D, their investors, and for a Ferrari for the founder?

The Internet will eventually support e.g. render
profitable, a couple of targeted advertising companies,
but it's going to take some time, and it's going to
cost so much to do (PowerAgent has burnt through,
what, seventeen million? and is still in trouble)
that the winning companies will be those that
had access to very deep pockets.

Andrew Forbes
andrew.forbes_at_redbridge.com

In chaos there is opportunity

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