In the Beginning: HotWired

Banners Didn't Start With the Wired Magazine Spinoof. Here'a a Look Back at One of the Internet's First Ad Players

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Internet advertising has come a long way since the day HotWired flared to life, Oct. 27, 1994, boasting the Internet's earliest banner ads.

HotWired, the online arm of Wired magazine and now a division of Lycos, set out to support a professionally published site with original content and advertising.

HotWired didn't invent banners. Proprietary online services such as America Online and Prodigy had been serving banner ads for several years. But advertising on the Internet was limited to a handful of banners and commercial messages in newsgroups.

HotWired's former ad director, Rick Boyce, now president of networks at teen and twentysomething Web site snowball.com, rounded up 12 sponsors for the launch of Hot-Wired, charging each $30,000 for a 12-week sponsorship. Because there were so few corporate sites at the time, agencies had to create sites and microsites as links to their ads.

HotWired had to track traffic on the ads using software created in-house.

While Mr. Boyce says he had no idea how big HotWired's audience would be, he did have some clues. HotWired had about 25,000 names on its e-mail list, and a sizable number of people were visiting the AOL Wired site. "So we knew we were pretty well positioned in cyberspace," he says.

Initial advertisers included AT&T Corp., MCI Corp., Sprint Corp., Club Med, Coors Brewing Co.'s Zima, IBM Corp., Harman International Industries' JBL speakers and Volvo Cars of North America.

Getting sponsors to commit was a cinch, says G.M. O'Connell, chairman-CEO of Modem Media, which placed the buy for AT&T and Zima. Mr. O'Connell calls it the first "hot" ad buy on the Internet with links to microsites.

"HotWired was as hot as a pistol, and you were making a statement by making it in," he says. "There was a big buzz around it. We were trying to create some buzz and differentiate some of our clients. It was the easiest sell Rick ever made."

The benefits of buying into the site far outweighed any risks, Mr. O'Connell says. "We knew what we were buying. We were buying buzz, and we were damn sure we were going to get that. The worst you could do was get a little egg on your face."

He says the ads were "extremely successful" for Hot-Wired, the Internet industry, Modem and its clients.

Modem tracked average 40% click-through rates for its clients, says Mr. O'Connell, adding, "This was a moment that if you were in it, you weren't going to screw up."

Sharon Katz, now VP-group media director at Modem Media, worked in the nontraditional media group at Ogilvy & Mather, New York, in 1994 when Mr. Boyce pitched her for client IBM.

Ms. Katz was handling media buys for kiosks, banners on proprietary services and other nontraditional media. She says there was no Internet access at Ogilvy at that time, so Mr. Boyce showed her HotWired on his laptop computer.

"We didn't understand the power of the Internet," she says.

But the buy made some rudimentary sense, she recalls: A computer with a modem connects people to HotWired, and IBM makes computers, she reasoned. "It was more a first-mover kind of move, rather than a deliberate plan."

Being involved in an Internet buy, she says, "You felt so entrepreneurial, that something big was going to break."

A similar desire led Frank D'Angelo, interactive group director at Messner Vetere Berger McNamee Schmetterer/Euro RSCG, New York, to bet on HotWired.

In 1994, Mr. D'Angelo was account supervisor for client MCI. He remembers that Bob Schmetterer had just returned from a Four A's meeting where he heard a speech on the future of marketing through the Internet and had made it an agency priority to get involved.

"[Mr. Schmetterer] knew to get us started, we needed to create a real deadline," says Mr. D'Angelo. "When this Wired opportunity came up, the agency took it upon itself to secure the ad buy without any client approval. It forced us to get involved and start to understand creative production. . . When we created a banner, it took you to a Web site. That got us to create the first campaign."

Messner Vetere also built sites for Club Med and Volvo.

For Mr. Boyce, the industry's growth since HotWired went live has been amazing. "In 1994, HotWired's revenues were around $300,000 or $400,000, and the whole industry's was under $1 million in ad revenue."

According to the Internet Advertising Bureau, Web ad revenue was $2.8 billion for the first three quarters of 1999; it is expected to approach $6 billion this year.

"I'm not sure if cable TV grew that fast," says Mr. Boyce. "I doubt it. I think the speed of development of this marketplace is mind-boggling."

Contributing: Alice Z. Cuneo and Jeffery D. Zbar.

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