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Who were the Major Players in the early days of internet
advertising?
Market is made up of Ad Servers and Ad Buyers
Both ISProviders and content portals:
AOL v CompuServe
Juno - May 1996, free email service- in December 1999, Juno began to offer the same service (minus technical support) for free,
provided the user ran the Juno client, which displayed a bar containing advertisements for the majority of the time that the user was
online.
NetZero - (launched 10/98: NetZero's model was free internet access to attract an audience for highly targeted advertising.
The ad serving technology has over 9 patents and NetZero was the first company to invent real-time URL targeted advertising
based on surfing patterns.In late 1999 several other companies began to copy the NetZero free access model including Juno
Online Services, Spinway launched with Yahoo! and AltaVista, Freei and BlueLight Internet, which was originally owned by Kmart.
They claimed to offer free Internet service forever, in exchange for displaying ads, either on a permanent toolbar or on a "banner"
that was shown when online. NetZero sued them for infringing on a banner ad patent. After the dotcom bust in early 2001, NetZero
acquired its competitors as each went bankrupt. In addition NetZero acquired AimTV which displayed full video quality 30 second
ad spots as well as Simpli and RocketCash.)
Major Players, cont.
EarthLink Gopher
Google - Adwords, Adsense (Oingo 1998 -> Google Acquisition 2003 for $120 mil)
Yahoo - Yahoo! Search Marketing, Contextual Advertising
GoTo.com: The new online advertising model that emerged in the early years of the 21st century, introduced
by GoTo.com (later Overture, then Yahoo and mass marketed by Google's AdWords program), relies heavily on tracking ad
response rather than impressions.
Other Players: ComScore
The pioneer of online advertising was Prodigy, a company then- owned by IBM and Sears at the time, although the first
clickable web ad was sold by Global Network Navigator (GNN) in 1993.HotWired (which would become Wired) was the first
web site to sell banner ads in large quantities to a wide range of major corporate advertisers.
Ad Servers
Ad serving: companies that provide the technology for companies to display ads on webpage, also serve to count number of visitors
and their activities. First remote service was FocaLink Media Services and introduced on July 17, 1995 for controlling the delivery
of online advertising or banner ads. In 1998, the company changed its name to AdKnowledge, and was purchased by CMGI in 1999
First local company was The first local ad server was released by NetGravity in January 1996] for delivering online advertising at
major publishing sites such as Yahoo and Pathfinder.
Market Players:
VendorAd viewers (millions)
Google1,118
DoubleClick (Google)1,079
Yahoo! 362
MSN (Microsoft)309
AOL156
Adbrite73
State of The Industry
Internet marketing also refers to the placement of media along many different stages of
the customer engagement cycle through search engine marketing (SEM), search engine
optimization (SEO),banner ads on specific websites, email marketing, and Web
2.0 strategies
TYPES OF INTERNET ADVERTISING
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Floating ad: An ad which moves across the user's screen or floats above the content.
Expanding ad: An ad which changes size and which may alter the contents of the webpage.
Polite ad: A method by which a large ad will be downloaded in smaller pieces to minimize the disruption of the content being
viewed
Wallpaper ad: An ad which changes the background of the page being viewed.
Trick banner: A banner ad that looks like a dialog box with buttons. It simulates an error message or an alert.
Pop-up: A new window which opens in front of the current one, displaying an advertisement, or entire webpage.
Pop-under: Similar to a Pop-Up except that the window is loaded or sent behind the current window so that the user does not
see it until they close one or more active windows.
Video ad: similar to a banner ad, except that instead of a static or animated image, actual moving video clips are displayed.
This is the kind of advertising most prominent in television, and many advertisers will use the same clips for both television and
online advertising.
Map ad: text or graphics linked from, and appearing in or over, a location on an electronic map such as on Google Maps.
Mobile ad: an SMS text or multi-media message sent to a cell phone.
Superstitial: An animated adv on a Web page from Enliven Marketing Technologies. It uses video, 3D content or Flash to
provide a TV-like advertisement. Used to be known as Unicast Transitional ads as they were originally made by Unicast
Communications but the company was acquired by Viewpoint Corporation in 2004, which then changed its name to Enliven in
2008.[4]
Interstitial ad: a full-page ad that appears before a user reaches their original destination.
Netscape launches as browser; CompuServe and America Online mainstream as ISPs; AT&T, Sprint,
Volvo create first banner ads. Time Warner launches Pathfinder, a "Pre-portal" website
94 - WebConnect is designed based on a direct response marketing model. Roy Schwedelson and Jay
Schwedelson return from COMDEX with initial concepts on a banner ad placement service.
94 Vibe Online cuts deals with MCI, Saturn, Timex, Jim Beam and Air Walk for dollar amounts ranging
from $20,000 to $60,000.
95 Yahoo!, a popular Web directory, transforms into a commercial business spanning user tracking and
database of user behavior, sponsored search results, and ad-words.
95 Proctor & Gamble and Kraft register a combined 184 domain names to secure their brand names in
cyberspace.
95 ESPNET SportsZone acquires eight advertisers to contracts totaling more than $1 million
9/95 Poppe Tyson spins off its web ad sales unit as DoubleClick. Whereas WebConnect took the path of
traditional direct response marketing for Web ad sales, DoubleClick adopts the Cookie technology which
tracks a user's activities on the Web.
1/96 The New York Times makes its entry into cyberspace with ads from Toyota and Chemical Bank.
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NetGravity introduced the AdServer ad management system for Web sites.
1996 Juno launches a free, ad-supported e-mail service. This is shortly followed by a similar service from
Freemark Communications. The Wall Street Journal makes its entry into cyberspace. iVillage nets six-digit
in advertising dollar commitments based on a corporate philosophy of humanizing cyberspace with
targeted online communities.
Marketwatch, a Web media planning tool, is introduced by FocaLink Communications.
4/1996 Microsoft says its aggressive plans will position them as the largest Web advertiser.
1996 Google develops out of a Ph.D. Thesis from Sergey Brin and Larry Page
9/15/2007 The domain google.com was registered on September 15, 1997 - Formally incorporated on
September 4th 1998. Both Brin and Page had been against using advertising pop-ups in a search engine,
or an "advertising funded search engines" model, and they wrote a research paper in 1998 on the topic
while still students. However, they soon changed their minds and early on allowed simple text ads.
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1998 Yahoo! makes a minimum advertising commitment to Netscape of $25 million over two years.
Time Inc. New Media agrees to syndicate some Pathfinder content on the Web site for the AT&T WorldNet
Service.
Microsoft Corp. announces it plans to purchase WebTV Networks Inc. for $425 million.
99 Time Warner shuts down Pathfinder, with analyst results showing that 98% of traffic headed to
individual sites.
2000: Google introduces its AdWords program, which will lead the text-based advertising movement
2007 - he global advertising market grew to just over US$600 billion in 2007, according to The
Kelsey Group, the leading provider of research, data and strategic analysis on directional and
interactive local media. The firm expects global ad revenues to grow at a compound annual
growth rate (CAGR) of 2.7 percent and reach US$707 billion in 2012, propelled in large part by
considerable growth in the interactive segment.
2012 - Market expected to grow to $707B annually
One major benefit of online advertising is the immediate publishing of information and content that is not limited by geography
or time. To that end, the emerging area of interactive advertising presents fresh challenges for advertisers who have hitherto
adopted an interruptive strategy.
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CPM (Cost Per Mille), also called "Cost Per Thousand (CPT), is where advertisers pay for exposure
of their message to a specific audience. "Per mille" means per thousand impressions, or loads of an
advertisement. However, some impressions may not be counted, such as a reload or internal user
action.
CPV (Cost Per Visitor) is where advertisers pay for the delivery of a Targeted Visitor to the advertisers
website.
CPV (Cost Per View) is when an advertiser pays for each unique user view of an advertisement or
website (usually used with pop-ups, pop-unders and interstitial ads).
CPC (Cost Per Click) is also known as Pay per click (PPC). Advertisers pay each time a user clicks
on their listing and is redirected to their website. They do not actually pay for the listing, but only when
the listing is clicked on. This system allows advertising specialists to refine searches and gain
information about their market. Under the Pay per click pricing system, advertisers pay for the right to
be listed under a series of target rich words that direct relevant traffic to their website, and pay only
when someone clicks on their listing which links directly to their website. CPC differs from CPV in that
each click is paid for regardless of whether the user makes it to the target site.
The POP UP
Pop-up ads or pop-ups are a form of online advertising on the World Wide Web intended to attract web traffic or capture
email addresses. Pop-ups are generally new web browser windows to display advertisements.
Banner Ads
Banner ad click-through rates have fallen over time; when they first started to appear, it was
not uncommon to have rates above five percent. They have fallen since then, currently
averaging closer to 0.2 or 0.3 percent.[1] In most cases, a 2% click-through rate would be
considered very successful, though the exact number is hotly debated and would vary
depending on the situation. The average click-through rate of 3% in the 1990s declined to
0.28% by 2003.[2] Since advertisers typically pay more for a high click-through rate, getting
many click-throughs with few purchases is undesirable to advertisers.[1] Similarly, by selecting
an appropriate advertising site with high affinity (e.g. a movie magazine for
a movie advertisement), the same banner can achieve a substantially higher CTR.
Personalized ads, unusual formats, and more obtrusive ads typically have higher click-through
rates than standard banner ads, however overly intrusive ads are often avoided by viewers.
Banner ads were valued and sold based on the number of impressions they generated. This
approach to banner ad sales proved successful and provided the economic foundation for the
web industry from the period of 1994 to 2000 until the market for banner ads "crashed" and
there was a radical revaluation of their value.
By the end of 1998, Google had an index of about 60 million pages.The home page was still marked "BETA", but an article
in Salon.com already argued that Google's search results were better than those of competitors like Hotbot or Excite.com, and
praised it for being more technologically innovative than the overloaded portal sites (like Yahoo!, Excite.com, Lycos,
Netscape's Netcenter,AOL.com, Go.com and MSN.com) which at that time, during the growing dot-com bubble, were seen as
"the future of the Web", especially by stock market investors
In 2000, Google began selling advertisements associated with search keywords. The ads were text-based to maintain an uncluttered
page design and to maximize page loading speed. Keywords were sold based on a combination of price bid and click-throughs, with
bidding starting at $.05 per click. This model of selling keyword advertising was pioneered by Goto.com (later renamed Overture
Services, before being acquired by Yahoo! and rebranded as Yahoo! Search Marketing). While many of its dot-com rivals failed in the
new Internet marketplace, Google quietly rose in stature while generating revenue.
Sources:
Overviews:http://en.wikipedia.org/wiki/Internet_marketing
Timeline: http://www.worldata.com/wdnet7/articles/the_history_of_Internet_Advertising.htm
http://www.usatoday.com/tech/webguide/2002-08-19-internet-ads_x.htm
http://en.wikipedia.org/wiki/CompuServe
Google: http://en.wikipedia.org/wiki/History_of_Google
http://www.google.com/corporate/history.html
http://techcrunch.com/2009/09/30/the-selling-of-google-adwords/
http://en.wikipedia.org/wiki/AdWords
Early Market information: http://www.kelseygroup.com/press/pr080225.asp
http://www.ecommercetimes.com/story/19789.html?wlc=1302147525
http://www.morganstanley.com/institutional/techresearch/pdfs/emarketing.pdf
http://www.ecommercetimes.com/story/19283.html
http://en.wikipedia.org/wiki/Online_advertising
http://en.wikipedia.org/wiki/Website_monetizing
http://en.wikipedia.org/wiki/Web_banner
http://www.kelseygroup.com/press/pr080225.asp
Graphics: http://wonder-tonic.com/geocitiesizer/