Advertising and the World Wide Web

David W. Schumann, Esther Thorson

• Publisher: Psychology Press
• Year: 1999
• ISBN:
  9781135672362
• Edition: 1
• Topic: Business
• Subtopic: Comportamento dei consumatori
• Index: Business

The chapters provide a wide-ranging view of issues addressing how advertisers can proceed on the Internet and World Wide Web. An initial chapter traces the development of Web advertising from its very beginnings as it was represented and discussed in the pages of Advertising Age. Although there is a noticeable trend to define Web advertising by comparing it to traditional media, it is clear that Web advertising just won't fit the old mold. Keith Reinhard of DDB Needham actually articulates this linkage between the old and new in his invited chapter. What the reader will encounter in Advertising and the World Wide Web is a solid conception of how Web advertising is different from anything that has come before. There are numerous discussions on consumer and advertiser interactivity, the role of Web advertising within larger campaigns, audience segmentation, and alternative Web-based promotion formats. The five sections cover definition and theory, structure, specific applications, legal issues, and the voice of the practitioner. Although there remain a few nay-sayers concerning the future of Web advertising, the reader will be able to see just how incredibly high-impact this new medium has become and the vast potential that it holds for future promotional endeavors.

Part 1
Definitions, History, and Theoretical Foundations

1
Web Advertising’s Birth and Early Childhood as Viewed in the Pages of Advertising Age

Esther Thorson
University of Missouri—Columbia

William D.Wells
University of Minnesota

Shelley Rogers
University of Missouri—Columbia

On October 4, 1993, Advertising Age (Ad Age) inaugurated “INTERACTIVE Media & Marketing” (a section henceforth referred to as INTERACTIVE), a new department in the popular and influential trade journal. World Wide Web advertising actually began just about the same time, early in 1994 (Briggs & Hollis, 1997). In the subsequent five years, advertising on the web has grown exponentially. Because appearance and disappearance of web advertising sites is common, and because ideas about what the Web will mean to advertising, both as a process and as an industry, come and go almost as quickly as the various sites themselves, Ad Age’s INTERACTIVE section provides a fascinating chronicle of the beginnings of Web advertising that is perhaps unlikely to be available anywhere else. For that reason, this chapter examines nearly five years of INTERACTIVE, discussing trends in the major issues that any new advertising medium must deal with: effectiveness with its audience, pricing, evaluating cost effectiveness, defining basic measurement units so a common language of web advertising can be developed, linkage with other media, either online or traditional, and so on. We also look at what this material means for academic and industrial researchers who must decide which aspects to invest in first, and what questions must be articulated.

Some Precipitating Stories

Reasons for the creation of INTERACTIVE can be seen in headlines from the weeks that preceded its appearance: “Video goes 3DO. Games to benefit from newest technology” (AA, 1/11/93, 1). ‘Time Warner hits road running. Ad presentations set for ‘superhighway’” (AA, 5/24/93, 1). “NBC dials interactive. New service lets viewers call 800-number for more advertiser info” (AA, 8/12/93, 1). “Most technology is ‘bullshit’ says Rosenshine. BBDO’s chairman takes a hard look at ‘nonsense’ about agency of future” (AA, 9/20/93, 4). “It’s a battle for new media. In the fight to purchase Paramount, contenders weigh interactive impact” (AA, 9/27/93, 1). The issues covered in these stories all pointed to the importance of “interactivity” for advertising, as well as for a variety of other marketing activities.

THE BIRTH

Consistent with the focus on interactivity in general in the precipitating stories, the first few months of INTERACTIVE focused on a variety of different media. The first words from the new department were, “The interactive digital age has set off a gold rush…” (AA, 10/4/93, 27). That metaphor led to an interview with Vincent Gross, “AT&T’s project director for interactive TV and multimedia.” He said:

This is a very big sandbox, and I think there’s going to be a lot of winners. It’s nothing less than a revolution in the way television is going to work…. (AA, 10/4/93, 27)

The next week featured more predictions. In a speech to a Business Week symposium, Keith Reinhard, CEO of DDB Needham Worldwide, said:

Now we tell the customers what we want them to know. In the age of multimedia, we must tell customers what they want to know.

He followed that with

We must remember…that advertising messages will be chosen by the customer. This will spell doom for ads that insult intelligence or offend sensibilities. The ads must be not only inviting but irresistible. (AA, 10/11/93, 40)

It is important to note that Reinhard is apparently conceptualizing Internet advertising as appearing in independent sites created by advertisers, rather than as appearing in content web sites such as newspapers and magazines. He is also focusing on the idea that this will be “pull” advertising, that is, that the consumer will have to go looking for it, rather than having it delivered.

By the end of its first month, INTERACTIVE had printed additional enthusiastic predictions. The most dazzling of the dazzlers came from Gerald Levin, Chairman—CEO of Time Warner. In describing the “Full Service Network,” he was about to launch in Orlando, he predicted,

It’s our belief that this technology will alter the way Americans inform, entertain, and educate themselves. This is not some dreamy future. By April 1994, we will hook up our first 4,000 customers. (AA, 10/18/93, 24, 27)

So, the first words were entirely enthusiastic: “This is going to be a very big sandbox”; “This will spell doom for ads that insult intelligence.” “This will alter the way Americans inform, entertain and educate themselves.” As we shall see when we get to 1998, these predictions, although not true yet of the masses, were clearly true for the large and ever-growing segment of web users.

The Early Naysayers

Not every early voice joined the enthusiastic chorus. An article entitled, “A new kind of sticker shock?” envisioned an era in which “our cable bill, which used to average about $26.00 a month, is now a whopping $135.00.” It wondered how many viewers would write checks for that much in-home entertainment. An article headed, “But skeptics warn marketers to watch out for rough road ahead” described an “almost endless lists of pitfalls” facing advertisers. The list included,

If the arithmetic doesn’t work for advertising on cable in a 30- channel universe, why should it work in a more segmented universe at higher cost?

and “We’re going to have another consumer revolt, and this one will be about privacy” (AA, 10/25/93, 24).

Another reported called, “Cerritos test shows there’s more to learn about interactive television” said,

GTE has only 3,000 Main Street subscribers, hardly an enthusiastic response to what is billed as the wave of the future by many media prophets.

It quoted Michael Noll, dean of the Annenberg School of Communication at the University of Southern California, as saying, “People don’t need it. You pay bills sitting at your table, not on a living room couch,” and it quoted a Cerritos respondent as saying, “Right now I can’t say it’s changing my lifestyle. I don’t think I’d miss it if we didn’t have it” (AA, 10/25/93, 20).

Other Interactive Media

Meanwhile, Ad Age was reporting other digital events that would affect interactive marketing and advertising. In the first issue of INTERACTIVE, it described a test by Sega of an all-videogame cable channel (AA, 10/4/93, 28). In the next issue, it described a 16-market tour of “Planet Bubble Yum,” a virtual reality game (AA, 10/4/93, 30). Later, it mentioned “Hollywood Online,” where subscribers to online home computer services could “access 15-second video clips, film star biographies, production information” and play dates of upcoming movies (AA, 10/11/93, 41). It described QBl, an “interactive football game” where patrons in “more than 1,300 establishments” could “play along” with the NFL by guessing what quarterbacks would call next (AA, 10/11/93, 41).

In “France says ‘oui’ to interactive kiosk,” Ad Age described an in-store workstation where customers could get odor-profiled by answering lifestyle questions (AA, 1/8/93, 25). Earlier, it had described CD-ROMs where customers could view and buy from Spiegel, Lands’ End, Patagonia, and Neiman-Marcus catalogs (AA, 10/18/93, 26); and, from the beginning, it had noted that home shopping channels with 800-numbers are important players on the interactive stage. All of these interactive marketing innovations would eventually become strategies available within the world of web advertising.

The first half of 1994 continued to see Ad Age focus on a variety of interactive new media, but not the Internet or the World Wide Web. For example, INTERACTIVE reported progress in videogames (AA, 1/10/94, 19); (AA, 3/7/94, 18), kiosks (AA, 1/17/94, 13; AA, 2/21/94, 17), CD-ROMs (AA, 1/19/94, 18; AA, 1/17/94, 14; AA, 3/14/94, 21), and home shopping (AA, 1/17/94, 17; AA, 2/28/94, 19), and it reported impressive forays into interactive media by all the major print and electronic media (AA, 1/10/94, 16; AA, 1/17/94, 16; AA, 2/21/94, 16; AA, 3/7/94, 22; AA, 3/21/94, IM-6). Then, suddenly in May, Ad Age recognized the Internet. In reporting interviews with “readers and online industry experts,” Ad Age (5/2/94) said,

Surprisingly, there seemed to be no doubts about the commercialization of the Internet, a global network of computers that has long serviced as a haven for academics, researchers and government workers. The Internet’s estimated 10 million to 20 million, mostly well-heeled users are simply too desirable an audience to be passed up by marketers. (p. 23)

Aside from two major errors, this statement turned out to be more than mildly prescient. First, it called academics, researchers, and government workers “mostly well-heeled,” and second, it failed to perceive that probably more

important than reaching an upscale audience was what could be done within the Internet medium itself—the incredible creativity and variety in types of information and interaction that would rapidly begin making its appearance!

A second major occurrence, during the spring of 1994, was a speech by Edwin L.Artzt, then Chairman-CEO of Procter & Gamble, to the annual conference of the American Association of Advertising Agencies. Mr. Artzt said,

Our most important advertising medium—television—is about to change big time…. We can’t be sure that ad-supported TV programming will have a future. (AA, 5/23/94, 24)

That speech, later called “the shot heard ‘round the advertising world,” reverberated for two reasons. First, it startled the advertising industry. When the chairman of a three billion dollar advertiser suggests that ad-supported television—and by extension, the ads and the ad revenues and the ad careers that go with it—“might not have a future,” people listen.

Second, it identified the essence of interactive marketing communication. Speaking of contemporary television, where semicaptive audiences watch most of the advertisements most of the time, Mr. Artzt said,

Procter & Gamble, in a given year, has to sell 400 million boxes of Tide—and to do that, we have to reach our consumers over and over throughout the year…. The only way you can achieve that kind of impact is with broad-reach television…. (AA, 5/23/94, 24)

But, in the interactive future,

It’s going to be harder than ever before just to reach consumers with our advertising, much less reach them with the frequency and regularity we need to build loyalty to our brands. (AA, 5/23/94, 42)

He added,

This is a real threat. These new media suppliers will give consumers what they want and potentially at a price they’re willing to pay. (AA, 5/23/94, 42)

As it turned out, Proctor & Gamble was already climbing aboard the new media engine, and would attempt to use its marketing clout to determine the direction of that engine, but at this time, Mr. Artzt was worried about a potential shift in power from marketer to customer. As we will see in 1998, however, marketers may have figured out a way to harness the Web, but to use it to continue to deliver advertising messages to customers, just as it does via television.

FAST FORWARDING NINE MONTHS–1995

In March, 1995, about 18 months after the birth of INTERACTIVE and about nine months after the “shot heard ‘round the advertising world,” we find that Advertising Age was taking stock. In a twelve-page special section called “The New Business of New Media,” the trade magazine reported more surprises. The lead article was “Building a new industry.” It began,

Interactive media. Skeptics call it the great zero-billion-dollar industry, full of pipe dreams and fancy schemes, overwhelming type and underwhelming results. But that description…misses the mark completely. There are already billions of dollars being made….

To get to “billions of dollars”—11.1 billion, to be exact—Ad Age totaled revenues from eight activities:

See Table

Note the order of magnitude: Videogames on top, interactive TV—the innovation that was to “alter the way Americans inform, entertain and educate themselves”—in the cellar. For perspective, remember that in 1994, revenues from old-fashioned linear television were about $29 billion (AA, 8/7/95, 13).

THE WEB BECOMES THE DOMINANT INTERACTIVE MEDIUM

In its discussion of this reordered industry, INTERACTIVE featured the World WideWeb. It said,

For marketers, the Web has swiftly emerged as a key new-media platform. By the end of last month, there were more than 2,500 commercial sites on the Web, many of them home to such mainstream brand names as MCI, Reebok, Volvo, and Club Med. In the first two months of this year, Advertising Age ran more stories about the Web than it did in all of 1994. (AA, 3/13/95, S4)

As we are about to see, the movement toward the Web as the dominant medium of interactive advertising was not to slow, but to speed.

“The New Business of New Media,” also carried full-page advertisements. Silicon Graphics ran a message that highlighted its Netscape home page. It said,

Introducing WebFORCE from Silicon Graphics. Not all Web sites are created equal. The most popular spots artfully combine graphics and text with audio and video. But authoring those kinds of mediarich Web pages has been extremely difficult. And most servers lack the horsepower to handle hundreds of visitors simultaneously.

WebFORCETM systems change all that—easily giving you power to author and to swerve the most compelling content on the World Wide Web. See exactly what we mean, once and for all. Stop in at <http://www.sgi.com> or call 1–800–800–7441. (AA, 3/13/95, S11)

In another full-page message, Poppe Tyson—a small company that before the Internet, had specialized in direct response marketing—said “So Not Every Ad Agency in the World is Trying to Look Electronic.” It continued,

Online. Interactive. Multimedia. Whatever you call it, ad agencies are falling all over themselves to get into it…. But for Poppe Tyson, it’s already a proven part of our clients’ communications portfolios…. Please visit our web site at <www.poppe.com> or contact Nicholas Buck the traditional way at 415.969.6800. (AA, 3/13/95, S13)

Here, we have a new systems manufacturer and a former direct marketing supplier staking claims to multimedia via traditional linear print. Ads like these would rapidly proliferate, and, as INTERACTIVE came to fill more and more space, its presence was clearly supported by this proliferation.

In the months that followed “The New Business of New Media,” INTERACTIVE paid even more attention to the Internet. It had already begun “CyberCritique,” a “monthly review of the latest online marketing efforts” (AA, 3/6/95, 18). In July, it featured a “Web Builders Showcase” that presented web sites from Convergent Media Systems, Organic Online, Renaissance, Executive Arts and Proxima—among others. The Proxima site said,

Proxima, Inc., an Internet Services Studio, specializes in the design and development of creative Web sites for corporations and organizations. Proxima has designed and implemented over 50 Web sites in 1995.

From online catalogs that sell your products in a secured environment to creative informational sites, Proxima provides a full lifecycle of Web development services that will make your site an Internet success. So let’s talk! (AA, 9/11/95, 41)

This was thus the beginning of what would become the central focus of INTERACTIVE—advertising on the Web. Even at this point, however, there were skeptics. In May, 1995, Ad Age ran an opinion piece by John Emmerling, chairman-chief creative officer of Emmerling Post. Emmerling declared,

In this country today there are just two mass “image” media. Only TV and magazines given national advertisers the tools they need to quickly extend a pervasive image-building message—in color—to tens of millions of average Americans…

and he concluded,

…in the year 2000, new media will remain a nice little boutique reaching a selective group of upscale, educated types. (AA, 5/15/95, 19)

Moreover, as Ad Age itself had often noted, fewer than one third of U.S. households have computers and fewer than half of those machines have decent Internet connections. As we look at the rest of 1995 and INTERACTIVE through early 1998, we find that Mr. Emmerling was apparently listening to the wrong muse.

Skepticism for web advertising probably reached an all-time high later in 1995. Yet, that did not stop advertisers and marketers from speeding onto the information superhighway. Indeed, 64 new web companies made it into Ad Age headlines. The questions being asked became more practical and focused not on whether, but how, will this new medium prove to be a viable and profitable advertising vehicle? Articles in 1995 promised more inventiveness, as marketers and advertisers experimented with ad gimmicks: coupons, scavenger hunts, giveaways, games and recipes. The idea was to create independent company or brand sites and somehow lure consumers to those sites. What we learned by year’s end was that only a few gimmicks worked, and those that did work sometimes attracted the wrong kind of customer (AA, 06/12/95, 16).

Meanwhile, web advertising could be said to be going through a defining phase. Tracking of users’ visits to the sites, ...

Table of contents

• Cover Page
• Title Page
• Copyright Page
• Preface
• Introduction
• Part 1: Definitions, History, and Theoretical Foundations
• Part 2: Structure, Function, and Effectiveness
• Part 3: Public Policy Issues
• Part 4: Applications