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and the Acceleration of Internet Advertising
of this medium is ‘second to none.’
by Hank Berkowitz
(New York, NY October 5, 2004) – Here are
some key takeaways I gleaned from a recent breakfast roundtable
discussion hosted by PricewaterhouseCoopers and the Software &
Information Industry Association in Manhattan. Let
me know what you think?
“Technology, audience and culture are three
powerful drivers of Internet advertising today,” according
to keynote speaker, Douglas W. McCormick, Chairman & CEO, iVillage,
On the technology side you have broadband penetration
throughout the workplace and at roughly 35-percent of U.S. households.
Broadband connectivity, said McCormick, “is the big thing
driving the Net today. Broadband’s importance to the Internet
is what cable hookups were to cable operators in the early 80s.”
According to PWC findings, the average broadband
user is spending 12.5 hours per week online and 75-percent of households
with incomes over $150,000 a year have broadband connections. Yet
Internet advertising today is just 3-percent to 4-percent of the
overall advertising pie.
According to McCormick and PWC data, when you have
broadband usage up 58-percent in one year, nearly two-thirds of
mainstream advertisers (63-percent) said the adoption of broadband
connections would encourage them to increase their advertising spend
in the year ahead.
Biggest thing today is behavioral targeting. Thanks
to Internet advertising, you have a highly measurable medium and
no longer does the old adage apply that “50-percent of advertising
dollars are wasted.”
McCormick outlined three discrete types of advertising
via the Web:
- Display – which is designed
to influence audience behavior
- Direct Response – which
encourages immediate buying
- Search – like the Yellow
pages. Respondent already wants to buy, just needs to find out
Each form of Web advertising is powerful and highly
measurable, but advertisers and their agencies need to assess carefully
their objectives before launching a campaign. You can't expect a
single campaign to accomplish all three objectives, McCormick noted.
“Accountability of the Internet is second
to none. No other medium can match its ‘get what you pay for’
accountability in this Sarbanes ROI era.”
More and more you’re seeing that buyers, creators
and sellers of Internet advertising are those who’ve grown
up with the medium, or at least spent much of their working life
with this medium. “It’s a lot easier to sell the medium
to those who live it and use it. Yong professionals in media today.
They grew up with the Net. Went to business school with the Net.
It’s already part of their lives. It’s always a lot
easier to preach to the converted.”
Vs. Other Media
By 2007, about 20-percent of the country will have
TiVo or DVR, noted McCormick. “About 10-percent of all broadcast
commercial messages on TV will never get seen. You can bet more
and more advertisers are looking elsewhere for their spend and the
Internet is a great place to accept those dollars.” The majority
of Internet advertising is not going to migrate out of print, so
much as migrate out of television and direct mail.