Perchance to dream of bannerless ads
By Max Smetannikov
You are a wide receiver catching the ball. You must dash from the 30-yard line, avoiding the grabby hands of the opposing team's defense, and score a touchdown. You have 30 seconds. You could win Superbowl tickets if you make it into the end zone. And you are wearing Nike sneakers.
A new video game? Nope. Try a newfangled online ad zipped to you via high-speed Internet connection.
With online advertising having rung up a puny $4 billion last year, compared with $32 billion in the broadcast industry, content providers that factor advertising into their business plans are anxious to boost revenue by ditching tired banners and pop-ups in favor of spots with more zip.
High hopes are riding on advances in streaming media technology, the arrival of cheaper and more widespread broadband access, the success of content distribution networks and convergence of the TV and PC in the home.
"The reason why no one is making any money on the Internet is because it was designed by geeks, by scientists and programmers, not commercial minds, and, if the technology was born today, advertisers would fashion the Internet after something that is making money, like commercial television," said Billy Star. He is president of Los Angeles-based ClearDigital and co-inventor of I-Ad, a patent-pending technology he hopes will make existing on-line ads obsolete.
In the theoretical football example above, I-Ad would remember how far each user has made it in 30-second dashes, and would extend the game over several ad spots. The hope is that Nike would stick in viewers/participants minds.
Star's plan is not as far-fetched as it sounds. Even today, the New York-based Internet-news channel iNexTV and Los Angeles-based movie channel CinemaNow are demonstrating full-blown streaming ads with elements of interactivity, which they plan to introduce in their broadcasts as early as May. Both sites, however, attract fewer than 20,000 visitors per week.
INexTV seems to be closer to target in lining up specific advertisers for its content sites. While Steven McBride, iNexTV director of interactive marketing and e-commerce, wouldn't name names, he said contracts are pending with three large automakers, two financial companies and one drug maker. INexTV's coup is in encoding its streams at 80 kilobits per second, which makes its content available to dial-up users. Usually streaming media is parceled in 300-Kbps streams to ensure quality.
INexTV's, and most likely CinemaNow's, ads will feature a postcard-size box in the page receiving a streaming media feed, a larger slide show window and text information feeding into the bottom of the screen. Interaction occurs when users click for additional information on the product during the commercial break.
"We will be experimenting with advertising that would induce you to click on the ad and do something with it," said Curt Marvis, chief executive of CinemaNow, a streaming entertainment portal majority-owned by Trimark Pictures.
While interactive TV and advertising rhetoric has been around for almost 10 years, some think this is the year the Internet will be ready for content-rich interactivity.
Content distributors such as Digital Island are positioning themselves to become the "networks" of the future, by syndicating and distributing content from others. Digital Island launched Footprint Media Services last week, an offering in which the company distributes streaming media content to an aggregated audience of users, and gets its share of advertising revenue by selling ad spots directly to advertisers like Nokia.
Operators of nationwide broadband networks like the data competitive local exchange carrier NorthPoint Communications are also thinking about reselling ad spots, once their content delivery services kick off later this year.
"I don't think online advertising is a banner play, and I don't think it's the insert of 30-second or 60-second commercials into a stream," said Adam Cohen, Digital Island's vice president of streaming. "I think we should leverage the medium and provide interactivity to learn more about the customer."