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Only 10 Years to Get to the Start Gate!

It seems hard to believe that it was in 1994 when we saw the first banner ad online that captured and monopolized our eyeballs. By the late 1990’s, dot-coms flush with venture capital cash, operated with a “money is no object” attitude and the hype knew no end.

When the dot-com crash hit, it seemed that online advertising was a lost cause. Ad blockers killed the banner ads, and spam killed the e-mail campaigns. Users tuned out, and it seemed that marketers had killed the golden goose. But a funny thing has happened between then and now. Not only has online advertising and marketing endured, but it has emerged as an absolutely crucial part of today’s marketing mix.

Online marketing brings new levels of reach, targeting and accountability, and has moved into the mainstream. Online advertising has become the solution to marketing problems at a level that other media haven’t been able to do.

The numbers back this up as shown by IAB and PricewaterhouseCoopers September report that online ad spending in the U.S. totaled $2.37 billion in the second quarter, a 42.7% increase over the same quarter last year. This shows the seventh consecutive quarter of growth, and the market today is growing at more than 20% per year.

Companies are spending at a level that is really pretty interesting. Consider Ford Motor Co, Tom Green the advertising manager of its truck division just finished a new season of marketing campaigns. Mr. Green says, “we gave digital as much thought and attention as any other medium. Look at the numbers,” he says, “80% of people who buy a Ford vehicle go to our Web site first. Half of all truck customers use online shopping sites. You’d be crazy as a marketer not to take this medium seriously.”

That much attention and spending is the fact that Internet usage is now firmly in the mainstream and broadband usage has grown by leaps and bounds.

According to Forrester Research, 64% of U.S. households are online, with nearly 20% or 23.1 million homes, using broadband. Nielsen/NetRatings, which measures individual users rather than households, reported that 51% of July users connected to the Internet by broadband vs. 49% by narrowband, an industry first.

Today the Internet is everywhere and when it’s not, people notice and demand that it be even more available. Online advertising has matured and it enables marketers to “target” consumers in a fine-tuned fashion creating highly personalized user experience. It’s as effective in getting across a communications and branding message as any other medium.

Online advertising also allows two-way interaction between advertisers and their targets, providing a “real-time” feedback loop that’s invaluable. A marketer can establish and maintain a two-way dialogue with a consumer online, and no other form of advertising can do this as effectively.

For large advertisers such as Procter & Gamble Co., online lets them interact with groups of consumers more directly than ever before. This is demonstrated by being able to engage with a million consumer database on a monthly basis through their Club Olay program.

Online advertising supports an almost endless variety of messaging formats, from banner ads and e-mail messages to more elaborate interactive vehicles and microsites. It‘s the capability to combine the motion and animated visuals of television with close-up and personal interaction.

The results of online advertising campaigns can be measured precisely, making publishers accountable for the promises they make and marketers accountable to management for the success of their programs. Yet even though online advertising has asserted its strengths, real-world marketers have made online just another medium in their standard marketing mix.

More than anything, what online provides mainstream advertisers is “another point of contact with the consumer” at various stages of the buying cycle. So where is the evolution of online advertising today? It’s been a crazy 10 years, but marketers say we’re closer to the “beginning” of learning how to take advantage of this new medium.

Online ads will get better targeted, with new concepts opening up new opportunities to marketers. We should see online ads becoming richer and more evocative, with animation and streaming video. If history is a guide, there will be ups and downs and the “hype” meter will spike at highs and lows, but the past has set the stage for future growth.

Marketers are on the cusp of a big trend now, made possible by the familiarity and true use of the internet as an advertising medium. This is the starting point, where the future growth in online advertising is just beginning to come into view. Where will you go from here?