Perhaps the most overused term in ad campaign development in 1997 was "beyond the banner" to describe new forms of Web advertising that transcend the static company logo and message in a banner ad. We prefer to call this "banner evolution." Using new technologies such as Shockwave, Java and Enliven, advertisers developed Web ads that incorporated interactivity, electronic commerce, sound and animation. An example is a banner ad from John Hancock Mutual Life Insurance Co. developed by Modem Media, Westport, Conn., that lets users input their children's ages to find out how much money they need to invest each month for a college education. These types of functional, entertaining and compelling ads are helping to brand and drive direct response, often without the user having to click through to an advertiser's Web site. And that is helping to spur the debate about whether dollars are better invested in Web site development or advertising, which will continue to be a hot topic in 1998.
While 1997 wasn't the watershed year for electronic commerce that many in the industry predicted, it was a year in which many mainstream marketers launched transactional capabilities on their sites and in which more users began shopping on the Web. Forrester Research said online retail revenue will total $2.4 billion in '97, driven in large part by new security technology, easier-to-use commerce sites and advertising that is helping to reduce consumers' fear about shopping online.
This year, we saw traditional advertising from established technology marketers, such as IBM Corp., AT&T Corp. and Microsoft Corp., as well as from electronic commerce companies such as CyberCash and Intershop that helped drive home the message that the Web is a safe place to conduct business.
Key to marketers' evaluation in Web ad buying is the ability to measure Web site traffic and verify how many ad impressions are delivered. While the industry still lacks standards, strides were taken in 1997 toward providing more measurement and independent auditing services.
New measurement companies including @plan, Relevant Knowledge and NetRatings were launched to compete with Media Metrix. Meanwhile, auditors ABC Interactive, BPA Interactive and I/PRO formed various partnerships and implemented new services to strengthen independent counting.
And in another important counting effort, ad management company MatchLogic announced its TrueCount service to solve the problem of counting ads cached on proxy servers. These efforts go a long way toward validating the Web as an effective ad medium.
Women SITES LAUNCH
The number of women logging onto the Internet soared in 1997, with some studies putting the number of women users on the Net as high as 40%. This growth compelled advertisers to go after those important family decision makers through targeted buys on women's channels and networks. Web sites targeting women were launched, relaunched and grew accordingly. New last year: women ad network the Women's Forum, PointCast's ParentTime at Work, America Online's Electra and Conde Net's phys.com. Sites that added new women-targeted content and/or advertisers included iVillage's Life Soup, Meredith Corp.'s LHJ Online, Hearst New Media's HomeArts, Women's Wire, and CMPnet's NetGuide and Cybergrrl's Women'sGuide.
Web expands its reach
The web is moving into living rooms, maybe. And hotel rooms, definitely. Microsoft Corp. paid $425 million for WebTV Networks, eyeing a way to merge Windows, television and the Internet. Rival Oracle Corp. and Thomson Consumer Electronics unveiled a similar product, the RCA Network Computer. But such products have generated far more hype than sales, especially since consumers this year found another cheap way to get wired: The below-$1,000 PCs by Compaq Computer Corp. and others.
The wiring of hotel rooms may be on a faster track. On Command Corp., which provides in-room movies, and At Home Corp., an Internet service, are pushing competing plans to bring the Web into hotel rooms, hooking up guests to the Web -- and to ads.
Search engines evolve
It became difficult to distinguish a search engine from a free online service in 1997. Excite, Infoseek Corp., Lycos and Yahoo! all added or expanded community-building services that would keep users on their sites, including free e-mail, chat, content channels, instant messaging and personalized searches.
It was also a race to pair up with commerce partners. To name a few: Market leader Yahoo! brokered deals with Visa International, for the Visa Shopping Guide by Yahoo!; bookseller Amazon.com; Sabre Group's Travelocity; and CDnow. Excite signed a three-year deal with Intuit for Excite Business & Investing by Quicken.com. Lycos negotiated various alliances with everyone from BarnesandNoble.com to 300 online merchants for the Lycos Shopping Network. Infoseek also did a redesign, adding multiple commerce and content partners, including Ameritrade, Borders Books & Music and Auto-by-Tel car sales site. Digital Equipment Corp.'s AltaVista was the only top search service that resisted the trend for now, only signing up Amazon.
com as its exclusive book seller.
Browser battles heat up
Microsoft corp. made its move on the Web; and Justice made its move on Microsoft. The marketer and many analysts bet the new Internet Explorer 4.0, launched in October, will take the browser lead over Netscape Communications Corp.'s Navigator and Communicator products. Dataquest said IE's global share nearly doubled to 39.4% in the third quarter from 20% in last year's fourth quarter, while Netscape fell to 57.6% from 73%.
Microsoft's biggest threat may be the Justice Department, which contends the software giant is violating a 1995 agreement with the feds by requiring PC makers to install IE with Windows 95. A judge from U.S. District Court in Washington D.C. this month issued a preliminary injunction that lets PC makers install the operating system without the browser. A final resolution may not come before spring. Microsoft insists the ruling won't affect a planned second-quarter launch of Windows 98, which uses a browser motif to search anything from the Web to the hard drive. If the ruling is still in effect, requiring Microsoft to offer a browserless version of Windows 98, "Then we'll figure out what we need to do," said a spokesman. Go figure.
E-mail gains respect
E-mail gained momentum as a valid marketing tool this year, as Internet incentive programs and ad-supported e-mail services took shape. ClickRewards introduced its Netcentives program; Emaginet kicked off its e-centives program; Intellipost Corp. launched BonusMail; and MotivationNet debuted its MyPoints program.
By yearend, all the programs were jockeying for key advertisers and redemption partners; and BonusMail was in the lead with 200,000 subscribers.
Meanwhile, the number of customers signing up for such free ad-supported e-mail services as Juno Online Services surged.
And last week, I/Pro released the E-mail I/AUDIT, one of the first services to audit e-mail publications, which will further aid the growth of this sector.
internet ad spending up
If fourth-quarter spending meets projections, it will be close to a $1 billion year for Internet ad spending. For the first three quarters, Internet ad spending totaled $571 million, up 263% over the same period in 1996. And with heavy Christmas spending anticipated , the industry is poised to meet Jupiter Communications' projections of closing out the year at $940 million.
Significant ad spending trends in 1997 included increased Web buying by traditional advertisers. In the second and third quarters, the No. 1 category was consumer-related advertising. Also, sponsorships were on the rise, making up 41% of total online advertising.
ad serving broadens
In a may report, Forrester Research projected that by 2001, the total online ad serving market would reach $48.6 million.The result has been a trend in which companies offer a broader range of products and services, as well as targeting smaller sites with more flexible pricing plans. Most recently, NetGravity's introduced its AdCenter service bureau in December and Focalink and ClickOver merged in November. Both ClickOver and NetGravity, apparently realizing there are only so many top sites that can afford do-it-yourself software packages, have responded to demand from smaller sites seeking full-service outsourced ad