Death of Banner Ads Exaggerated

by Julia Scheeres

2:00 a.m. Jan. 26, 2001 PST

Sick of those pesky little banner ads? Just wait and see what's around the corner.

Despite setbacks, the online advertising industry is poised to grow and get even more irritating, er, effective, than ever, Internet pundits say.

"Online advertising's death is greatly exaggerated,” says a Forrester Research study based on interviews with 59 industry bigwigs including AOL, MSN and IDG. Advertisers plan to double online spending by 2003, signaling a 508 percent increase in between 2000 and 2005, the report says.

The news appears to fly in the face of reality.

Despite a small upturn during the Christmas season, the online advertising industry is still fraught with insecurities, as is everything Net-related.

Ad firms Engage and 24/7 Media blamed recent layoffs on "challenging market conditions.” Earlier this month, Merrill Lynch reduced its 2001 spending estimate for online advertising to $8 billion from $9 billion. And Yahoo, the bellwether industry giant, is backing away from online advertising warning of slow growth this year.

But online advertising is overdue for a facelift, according to Forrester.

Traditional advertisers — not dot-commers — will "embrace and drive” 84 percent of digital marketing in the United States by 2005, the report said.

Old media revenues will wither as mainstream advertisers storm the Net. Instead of stuffing junk mail into the mailbox outside your house, they'll send it directly to your inbox. And companies get smarter, choosing sites that take better aim at their quarry, er, potential customers.

"It's very much a targeted medium,” Robin Neilfield, co-founder of NetPlus Marketing. "You have to analyze the content on a site, you can't just buy based on demographics.”

So you probably won't see Rolex ads on sites like Poor White Trash anytime soon.

The impetus behind the rosy-cheeked forecast is obvious: The Internet is going gangbusters worldwide and is a force to be reckoned with. In 1999, Forrester predicted that 60 million U.S. households would be online in 2003. Now the company says that number will be reached this year. And that's just in the United States.

All this growth is ripe pickin' for advertising execs. DoubleClick — the largest online ad agency -– expects revenue from the virtually untapped Asian market to double this year, for example.

But as online advertising grows, so will its intrusion into your life. Just as people learned to ignore banner ads, companies deployed new tactics designed to grab you by the balls (or equivalent female parts) and make you take heed.

First came pop-ups, small windows that spring onto your monitor while Internet pages are loading. Then came interstitials, ads that play between page views, not unlike a commercial break in a television show. Now we have superstitials, large ads that play up to 20 seconds of animated advertising while the Internet connection is idle.

These new ads are highly effective, said Marc Ryan, director of media research for AdRelevance.

"You're interrupting the user so they're forced to pay attention,” said Ryan. "When the banner first started (people) were really annoyed with it, but they’ve learned to live with it. I guess they'll do the same here.”

Sorry, folks. There's no such thing as commercial-free Internet.

From hotwired.com