Advertising is a popular spectator sport on the Internet. It's part of the show, like the commercials in a Super Bowl telecast. And at least some of the fascination these days comes from watching how the original banner ads have fractured ">
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The next generation of online advertising

Advertising is a popular spectator sport on the Internet. It's part of the show, like the commercials in a Super Bowl telecast. And at least some of the fascination these days comes from watching how the original banner ads have fractured into a variety of different strategies and formats: pop-ups, pop-unders, streaming videos, flash animations, and tiny cartoon characters that bounce around the screen.

"Look what they are trying now," we mutter to ourselves as we evaluate. Annoying? Effective? Annoying and effective?

"What we're seeing today is version 2.0 of online advertising," said Doug Weaver of Upstream Group, an advertising consulting group that advises Internet sites on strategy.

There is one primary reason why we're seeing these new flavors of online advertising, according to Weaver: Banner ads have been a resounding failure.

"Basically we've spent the last seven years learning that we can't reengineer the way people interact with advertising," he said.

"We all realize now that people don't click on ads."

Weaver's view is backed up by the numbers. Recent studies have demonstrated that the click rate for banner ads is down to about one quarter of 1 percent.

"Internet advertising started out by asking people to respond to an ad when they see it," said Weaver.

"Consumers have soundly rejected that approach. Now advertisers have to meet customers on the customers' terms."

What this means for Internet users is that we are currently encountering an entirely new generation of online advertising approaches and techniques, enough to warrant a field guide to the major species.

It's difficult to accurately date many of these new approaches: The line between beta and live is often fuzzy. Also some formats have taken longer to make the leap from the first few sites to more general adoption.

But most have been launched within the past year, and are still struggling to achieve critical mass.

Similarly, the effectiveness of these new formats can be difficult to quantify. In fact many of these advertisements are a reaction against click-oriented banner ads that delivered numbers but little else. The trend today is toward the kind of branding and awareness that characterizes traditional media advertising campaigns.

There are many variations on these types, of course, and some styles that mix and match features. But for the casual observer/

Web surfer, here are the major online advertising families and genera, flora, and fauna:

Skyscrapers and big windows

Forget banners. The thoroughly modern way to think about online advertising is in Interactive Marketing Units, or IMUs. The Interactive Advertising Bureau, an industry association that represents the sellers of interactive marketing and media, now maintains an extensive collection of online advertising standards and sizes on its Web site (, and the variety is impressive. Among the most popular new formats: "skyscrapers," tall columns that run on either side of a Web page, and "big windows," that sit right smack in the center of the page.

"The primary advantage of these formats is their flexibility," said Greg Stuart, CEO of the bureau.

"Banners were always stuck at the top of the screen, but now we've got more flexibility in ad formats - not just size, but placement - and that means more revenue from the same page."

Jim Nail, an advertising analyst with Cambridge-based Forrester Research, sees the process as natural evolution.

"In the early days, when the Internet was this quasi-governmental thing, the banner ad was a little small thing, because people were worried about crass commercialism," he said.

That's changing, particularly as Web-based content sites wrestle with an unfriendly advertising climate.

Nail points out that the classic online ad banner takes up just 10 percent of screen space. By contrast, the percentage of advertising-to-content in newspapers is 50/50. The ad ratio on television runs close to 17 minutes per


"What we're seeing is very active experimentation in terms of what is the proper advertising-to-content ratio on the Internet," he said.

"And I think we still have a ways to go."

Rich media

You click on the front page of a major Web site. Within a few seconds, as you are still reading the page, a very small circular image of a balmy beach scene appears. Then, before you get a chance to click on it, or click away from it, the circle contracts and zips to an undulating text ad in the upper right corner that reads, "Out of the Blue: Bermuda." Click on the text and you are delivered to the official site of the Bermuda Tourism Board.

You've just experienced a "rich media" advertisement, specifically a "shoshkeles" created by a New York-based company called United Virtualities. These ads, which have driven high-profile Web campaigns for and, are part of the "rich media" category.

They use Dynamic HTML and Macromedia Flash to create surprising levels of interactivity: from characters that bounce around a Web page to banner ads that expand when you run your mouse over them.

Eyeblaster, another New York firm, and Enliven, based in Waltham, are also using "rich media" techniques to increase the capability of online advertising.

Forrester's Jim Nail is almost embarrassed to admit that he is impressed with rich media ads, particularly the shoshkeles (after the middle name of the company founder's daughter).

"For two reasons," he said. "One: These ads are usually intrusive enough so that you can't miss them. And two: Even I, a grizzled, cynical advertising analyst, often has to admit, 'You know, that was kind of cute.' "

Progressive pop

By now most Internet users are familiar with the pop-up ads, the small boxes that leap out to greet you when you first visit a Web site. Pop-under ads, popularized by the X-10 spy camera ads, are a minor variation: The ads launch and lurk until you click off the site - then they pop up.

Recently separate, freestanding windows have proliferated on the Web, expanding to multi media versions, called "interstitials." One New York-based company, Unicast, is aggressively pushing pop-up interstitials toward television-style advertising: 20-second segments that contain graphics, animation, and sound, and run in "logical breaks" between pages in Web content.

"We believe that if the Internet is going to prosper as an advertising medium, it needs a television-like format," said Dick Hopple, CEO of Unicast, whose company has created an interstitial product it calls a "Superstitial."

Hopple is also hoping that this format will also attract TV-style rates.

"Right now the average Superstitial sells for $25 CPM [cost per thousand impressions], which is approximately what TV ads sell for," Hopple says. "That's important, because if major advertisers are going to move dollars into this new medium, they need a comparable ad product. Banners haven't been able to offer that."

The target approach

The content on is so narrowly focused that it's almost a foreign language. This is a site for people who care if "SAN and NAS convergence will continue." (That's storage area network and network-attached storage, if you're not in the data storage business.)

But it's all by design. Created by Needham-based TechTarget, SearchStorage is designed to reach only those people who care passionately about computer storage - and the advertisers who want to reach them.

Significantly, Hopkinton's EMC Corp. is an advertiser on SearchStorage.

TechTarget has 20 such sites devoted to very specific IT topics, like Windows 2000 and Internet security. The content for each topic ranges over Web sites, streaming Webcasts, and e-mail newsletters. Once TechTarget has a critical mass of techies on a topic, it starts selling focused ads to interested vendors., a business unit of IDG, the Boston-based IT media, research, and exposition company, is pursuing a similar strategy, building audiences around narrow technical topics.

"It's a very good market because the typical IT guy is a real Internet power user," TechTarget chief executive Greg Strakosch said.

"Web research is a major part of his buying process, which makes online advertising a natural."

Upstream's Doug Weaver concurs.

"Reaching the IT person who's trying to make a decision on converting to Linux, or buying data storage, is extremely difficult," he said. "You could spend millions on general advertising and miss him. Niche sites that can deliver that buyer make a lot of sense as a business."

SurroundSessions and beyond

Like most professionals who have been working in the online advertising world, Craig Calder was dissatisfied with banner ads.

"Banners were clearly losing efficiency," said Calder, who is vice president of marketing at New York Times Digital (owned by The New York Times Co., the parent of The Boston Globe).

Specifically, Calder was frustrated by the limited range of the traditional Web advertising format. "Banners are good if you want to get X number of responses to X number of impressions," he said. "But when you're talking about quality of content, quality of audiences, loyalty - you cannot really leverage those features with banners. It's all just clicks."

So Calder got to work, attempting to create a new ad format from scratch. What he came up with was a concept he calls SurroundSessions, which allows an advertiser to display a series of messages to a single user during the same session.

"The idea was to get away from random banners, to create an environment where the advertising works together," Calder said.

In November, a pharmaceutical company, AstraZeneca, used Calder's system to market a new drug, Nexium. The company was able to serve visitors to a sequence of ads that had a variety of purposes: branding, information, awareness, and e-mail acquisition. American Airlines also signed up for the new system., a New York Times Digital property, is scheduled to roll out a SurroundSessions in next month.

Early results indicate that the typical SurroundSessions lasts 10 to 11 minutes and comprises 12 to 15 pages, promising enough to inspire the Online Publishing Association, an Internet media trade group, to actively promote the new format as a "fundamental buying unit."

Significantly, Calder was able to create his new approach by working with his in-house tech team, using existing ad serving software.

Which may give a hint to future online advertising advances to come: less about technology, and more about creative approaches to marketing and advertising.

"The next big challenge probably won't be to find one really great online advertising technology," Forrester's Jim Nail said. "Instead the idea will be more creative campaigns. If all these new formats allow advertisers to put marketing objectives first, that will probably be the most important advance of all."


D.C. Denison, The Boston Globe. January 14, 2002

Copyright © 2002 The Globe. All rights reserved.