Online fever sparks revitalized AD:TECH

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Proving that online advertising is back in full force, a record 6,000 attendees jammed the AD:TECH online conference in San Francisco last week, up 50% from last year's event.

More than 180 exhibitors demonstrated new products and technologies for search, e-mail, RSS and rich media, and conference attendees packed into sessions to debate strategies for effective online marketing.

"We think Internet advertising spending has nowhere to go but up," said Morgan Stanley analyst Mary Meeker during the opening keynote address on April 25.

Online ad spending was up 33% in 2004 over 2003, according to the Interactive Advertising Bureau, and is expected to grow by at least that much this year, according to various industry projections.

Researcher eMarketer boosted its online ad growth forecast to 33.7% for 2005, from an earlier projection of 21%.

However, Meeker said, even with this rapid growth, online advertising is the most underused advertising medium, capturing only 3% of total advertising spending in the U.S.

Some traditional advertisers are bucking this trend. Visa USA recently named Jon Raj VP-online advertising and emerging media platforms, from director of advertising, demonstrating the company's commitment to online advertising.

Raj, who attended AD:TECH, said Visa's online ad budget has increased steadily over the past four years, although he declined to cite specific budget figures.

Ford Motor Co.'s Lincoln-Mercury unit is another traditional brand advertiser that has boosted its online ad budget, currently spending about 25% of its total marketing budget online, according to eMarketer.

The shift toward more online is due in large part to the increased penetration of broadband, which is now in 36% of all households and more than 90% of all businesses, said Geoff Ramsey, CEO of eMarketer, during a presentation on online ad trends.

"It's not just about search anymore," Ramsey said, noting that while the search category grew by 51% last year, non-search categories grew by 19.7%. This year, eMarketer projects search advertising to grow by 40% and non-search advertising to grow by 29.2%.

In other research announced at the show, CNET Networks released findings of a survey conducted by the Starch Communications division of NOP World on the effectiveness of online advertising formats.

According to the report, based on surveys of more than 8,600 users on CNET's and, ads that were simple and communicated a clear benefit rated the highest.

The most effective ad formats were the large rectangle, leaderboard and skyscraper. The large rectangle was found to be most effective when using rich graphics and motion; the leaderboard was found to be effective in communicating information about product benefits; and the vertical ad was found to be effective at grabbing the reader's attention, due to its positioning on the side of the page.

Also, according to the CNET research, ads that conveyed an emotional benefit, such as the excitement of playing a game, as well as a rational benefit, such as a game's release date, performed well.

Also at the conference, b-to-b marketers discussed strategies for lead generation.

Marty Lash, director of channel marketing at Mitsubishi Electric, presented six steps to a successful lead generation program. They are: Identify success metrics, such as sales goals, and set appropriate benchmarks; build a clear strategy; implement an end-to-end tracking system; establish a testing process; create a lead qualification program; and analyze and reapply.

Mitsubishi has had a high success rate by following these steps, Lash said. Nearly 70% of the lead referrals delivered to dealers resulted in a purchase.

Wendy Ravech, VP-corporate marketing and communications at Akamai, which provides content delivery services, said the company uses partner marketing to generate leads, including partnering with customers to co-sponsor events.

Several companies announced new products, including Dynamic Logic, Atlas and Google.

Dynamic Logic released MarketNorms 2.0, an online planning tool that lets advertisers compare online advertising effectiveness data, including brand metrics, by industry.

Atlas, an operating unit of aQuantive, announced the release of Atlas Rich Media, an integrated rich media ad server that provides campaign planning, delivery and reporting for rich media advertising.

Google announced a new contextual ad serving program that will allow advertisers to serve ads with images on sites outside the Google network. The new program is offered to advertisers that use Google's AdWords for Content program. M

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