Online ad market roaring

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Online advertising is booming once again, as demonstrated by record revenue as well as record crowds at Ad:Tech 04 in San Francisco last month.

Kicking off the show on May 24 with good news for the industry, the Interactive Advertising Bureau reported that Internet advertising revenue reached a record $2.3 billion in the first quarter, up 38.9% over the first quarter of 2003.

Ad:Tech’s attendance set a record as well, with more than 4,000 attendees jamming the corridors of the Palace Hotel to attend standing-room-only sessions and cruise the show floor to see the latest technology.

"It’s wonderful to see the energy behind interactive again," said Mark Kingdon, CEO of Organic Online, one of the original interactive agencies, sharing his perspective about the show.

"The Internet was put in the penalty box for two to two and a half years after the bubble burst. Today, clients view interactive as an integral part of the marketing mix," he said.

Integration was the theme of Ad:Tech, as marketers, agencies and publishers shared strategies for making the Internet an effective, accountable part of a company’s overall marketing plan.

"Everything we do starts with the Internet," said Peter Weedfald, senior VP-strategic marketing and new media at Samsung Electronics America, during a keynote speech at the show.

Weedfald said that before a TV spot is created or any marketing campaign is developed, Samsung first devises the Internet strategy.

CRM: Customers really matter

"You have to overhaul your entire Internet infrastructure," he said, noting that companies need to use the Internet to drive relationships with customers before they do anything else. "The only way to drive the Internet is CRM, which is not customer relationship management but ‘customers really matter.’ "

Samsung has built an Internet infrastructure to attract and retain customers. It features 25 different "touch points," all of which are tracked and analyzed.

The marketer runs 40 to 50 different online campaigns each month, and it maintains a Web presence on the home pages of 360 sites, 24 hours a day, 365 days a year, Weedfald said. "You have to build an infrastructure to do one-to-one marketing," he added.

Allison Johnson, senior VP-global brand and communications at Hewlett-Packard Co., also spoke of the importance of using the Internet to maintain customer relationships.

"As technology companies look to drive growth in new areas, how do we build relevance?" Johnson said during the opening keynote address at Ad:Tech.

"It is all about creating experiences and brand relationships with customers."

Johnson pointed to Operation One Voice, a Hewlett-Packard Co. initiative launched last year to create an integrated marketing approach across the entire company.

"We have unified every aspect of every touch point with the customer," she said.

Johnson spoke primarily about HP’s consumer marketing campaigns, including the "You + HP" campaign that broke in 2003.

One of the key initiatives of the campaign was a Web site featuring "You Stories," on which HP users could post pictures taken with digital cameras and share personal stories. "It created brand loyalty, a brand relationship and brand love," Johnson said.

The site also gave HP the opportunity to track every aspect of the customer relationship lifecycle, from when the product was ordered to how quickly it arrived to how soon the customer started using it. "It has been the most effective component of the campaign," Johnson said.

During a panel on technology marketing, b-to-b executives discussed strategies for Internet marketing and how they allocate their online spending.

Michael Grekin, group advertising director at Siebel Systems, said the use of online advertising has grown significantly since 2001, at the expense of print advertising.

In 2001, Siebel allocated 60% of its overall ad budget to television, 33% to print and only 7% to online. Last year, Siebel cut print entirely out of the mix, allocating 75% of its budget to television and 25% to online.

"The combination of TV and online is a one-two punch," Grekin said, noting that print advertising just wasn’t effective in reaching the company’s target audience.

Grekin said rich media technologies also give Siebel an opportunity to deliver TV spots online, thus optimizing the media spend.

Hybrid solutions at Oracle

Bill Carper, senior director of global campaigns and direct marketing at Oracle Corp., said Oracle uses a combination of sponsored content, Webcasts, sponsored research and online advertising to reach its customers. "We have migrated a lot of our spending to hybrid solutions," he said, noting that the company has moved away from buying just banner ads.

Also at the show, technology companies showcased new services including rich media platforms, search marketing, ad management and e-mail marketing.

During a panel on rich media trends, Allie Savarino, senior VP of Unicast, demonstrated the company’s side-by-side video commercial, which will be available in mid-June.

The ad format plays a broadcast-quality TV spot on one side of the screen and lets users interact on the other side, such as taking a poll or requesting information.

"There is really a trend among advertisers that don’t want to just replicate their TV ad on the Internet to build a relationship. What you have [with the video commercial] is interactive TV coming online before it comes to TV," Savarino said.

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