• by Joe Mandese  @mp_joemandese, April 4, 2011

How a wealth of bandwidth, technology and real-time data are converging to transform online advertising into dynamic story-telling

It's been 17 years since DoubleClick served the first ad online - a simple banner for AT&T on hotwire.com - and gazillions of similar ad impressions have been generated in essentially the same way: an ad server sending data to a Web user's browser, which assembled it into little boxes framed on a publisher's page. The dimensions of those boxes have varied over time, and the content contained within has grown richer, as technological advances allowed for animation and full-motion video, giving online advertising the same sight, sound and motion capabilities as the best commercial ever televised. But as visually rich as online advertising formats may have grown, from a technical point of view, even the most sophisticated haven't evolved much beyond a poor man's TV spot. Technically speaking, that's a shame, because as a new generation of online advertising technologies - let's call them the nouveau riche media - are proving, the Internet is capable of so much more. In fact, they are proving that online advertising is capable of doing just about anything you'd want it to do.

The story begins nearly two years after the at&t ad appeared on Hotwire, in 1996, when Hewlett-Packard embedded old-school video game Pong into a banner ad, creating what likely was the first interactive ad to utilize rich media online. Even at that most seminal moment, Madison Avenue understood that online advertising was capable of something no ad medium before it could do, and it wasn't just simple interactivity, but something far more dynamic. It just took a couple of decades for the technology, the infrastructure and the vision to catch up with it. Untold punch-the-monkey ads later, the ad industry is finally beginning to shake its old "publishing" mindset about online media, and is starting to think of it as something new - something that hasn't even fully been imagined yet. Instead of thinking of it as serving static data into little pixel-by-pixel frames on a page, these nouveau riche media platforms are programmable windows capable of receiving continuous dynamic data that can render just about anything a creative thinker could come up with. And the real challenge for Madison Avenue will be in imagining what to do when it has a world of unlimited possibilities.

"Online display advertising is experiencing a fundamental shift in the types of creative experiences it delivers to the consumer," says Greg Rogers, CEO of Pictela, which AOL acquired for millions of dollars last December to make it the centerpiece of CEO Tim Armstrong's plan to reduce the amount of brand clutter and boost the quality of the advertising experience for AOL's users and advertisers alike.

Rogers says it was a "confluence" of technological advancements, especially improvements in bandwidth speeds created by cloud computing, which is enabling advertisers, agencies and publishers to do things that the fathers of Internet advertising never could have imagined. In the case of Pictela, the innovation is primarily about the fidelity of the online advertising experience. In particular, the ability to render robust, high-density content - anything from high-definition television content to the entire Sears, Roebuck catalogue - all in real-time and without a user having to leave a publisher's page. Just mouse over a Pictela window and it opens into a world where almost anything is possible. And all in real-time. In the case of other nouveau riche media platforms, it is their ability to utilize embedded programming applications - so-called APIs - that can feed dynamic data into a variety of new online advertising formats, transforming them into "smart, real-time ads" that can change the way consumers experience them, but also require advertisers and agencies to rethink how they tell stories about their brands.

The good news is that advertisers and agencies already have a running start thanks to the mobile apps revolution, which has forced Madison Avenue to begin thinking of advertising as more than just fixed data that can be displayed, listened to, watched, or even responded to. As apps have demonstrated, advertising can be programming too. And programs can be almost anything their inventors program them to do, including sophisticated applications or utilities, or the ability to stream dynamic storytelling drawn from real-time data feeds.

Mobile apps may have whetted Madison Avenue's appetite for this new storytelling, but as Pictela's Rogers notes, it has taken some other concurrent developments in digital media infrastructure to make it a reality, especially the emergence of powerful distributed "cloud" computing servers that have made the Internet capable of doing things that early display ad pioneers like at&t and hp never could have imagined.

To illustrate the impact cloud computing has had on the ability to serve content online, digital advertising pioneer David Kenny likes to cite the Victoria's Secret Fashion Show. Kenny, the former head of Publicis' VivaKi organization, and now head of massive cloud-computing server Akamai, says that when the women's lingerie company tried streaming its titillating runway models online in 1999, there was not enough bandwidth to make it "work quite right." At the time, Kenny says Akamai was capable of serving six gigabytes per second, but even that only resulted in a herky-jerky experience for the millions of online users who tried to stream it. Fast forward to today, and the thousands of new ad servers Akamai has installed since then have grown its ad-serving bandwidth "3,000 times." Enough, says Kenny, to stream "the entire contents of the Library of Congress" in about 25 seconds.

Technology isn't just expanding bandwidth and real-time streaming, but also the way new online ad formats convey data and what they can do with it. The technologies, and the dynamic storytelling nature they enable, are so new that Madison Avenue still hasn't figured out what to call them, but agency executives know it should be something broader than just "rich media."

"One of the most challenging parts is figuring out what to call them," says Brian Monahan, the head of the IPG Media Lab, which recently conducted a study analyzing the effectiveness of several new rich-media platforms, mainly ones that utilize APIs to dynamically stream data into online display ads, making them more of a real-time medium. Consequently, Monahan is keen on calling them "real-time rich media," though he also likes the concept of "filthy rich media," because it suggests that they are ridiculously rich versus conventional rich-media advertising formats.

Ever since taking over management of the IPG Lab last year, Monahan has been a big proponent of the new online advertising platforms, because he believes it is where storytelling is heading for all brands, not just online, but with all media. While APIs are obviously impacting online and mobile advertising, Monahan says the notion of real-time distributed storytelling is going to migrate into all forms of media. Ultimately technology will enable even the most traditional media to become more programmable and function more as real-time ad platforms, as well.

"The most important part of this story is storytelling," says Monahan. "The big question is, now that we can do this, how do you take all this data that's being made available through the cloud and pipe it into real-time information for consumers about traffic reports, or pollen counts, or weather updates, or tweets, or even things like inventory availability and pricing, which in their own way, each contribute to a brand's message and story?"

Monahan cites those kinds of time-sensitive and ever-changing data examples, because they are easy ones to grasp for dynamic online storytelling, but he says the concept is bigger than just simple tickers, and will require other parts of Madison Avenue - especially big creative shops and their creative teams - to get their minds around the concept before it can be embraced in a big way.

Based on his initial meetings with some of the creative teams of Interpublic's agencies, Monahan says they "get it," and are eager to begin conceptualizing what they can do with dynamic ad platforms. But he says it will be a while before they can really define how to utilize the technology.

Among other things, he says the real-time data aspect is only one element of what they can do. Another is real-time "dynamic assemblage," or the ability for an ad's content to be assembled on-the-fly based on data cues.

"I think that immediately appeals to the engineering side of the business, because they can see how this comes together. It's the idea that if I know something about an individual, I can also populate different modules of the creative to be relevant to them within the creative unit itself," Monahan says. "Unless you have the people who write the ad, and concept the ad, and find the right creative people who can approach dynamic data stories, it can't really take off. You need people who can think about storytelling using dynamic data." The people most prone to think that way right now are people who develop APIs for mobile apps, and Monahan says it is most likely those "creatives" - either inside agencies or at independent mobile app developers - who are apt to represent the creative people that Madison Avenue should be cultivating and recruiting.

"It's okay to have a feed from Twitter. It is okay to have weather conditions being updated. And it is okay to pop in financial market information," but it all has to make sense from the standpoint of brand messaging and brand guidelines."

That requires an understanding of some prosaic, but important, things like legal and compliance issues for company brands. But Monahan says the real opportunity may be in leveraging things about the brand that are inherently dynamic and appealing to consumers.

"We have to think hard about what is unique to our brands that already throws off dynamic data that we can then figure out how to use in a way that makes our impression be of the moment," he explains. "The ad server is a technology that is more than 10 years old. We need to start thinking of it as a content delivery system," says Troy Young, president of Say Media, a nouveau riche media company that was formed when old-school rich-media company VideoEgg acquired social media "conversational marketing" firm Six Apart last year. By integrating real-time social media conversations and other elements into API-enabled online display ads, Young says advertisers are effectively using servers to deliver content, not just ads.

But even that, Young says, requires a new conceptual framework for marketers and agencies that are rooted in linear, time-based advertising. "They think, 'We're going to run this ad now so that somebody takes action in the future,' but people don't experience things that way. They experience them in real time."

Young says Madison Avenue is just beginning to figure out how to utilize the real-time approach, but cites a campaign Say recently implemented for Hyatt that "bundled data on the fly," based on where online users were located and what the weather was like in their locations.

"Wherever you were, we were dynamically updating the storytelling in terms of the weather conditions being experienced by the user. It was real-time storytelling," Young says, acknowledging that while the Hyatt example utilizes a simplistic approach, that may be the right way for some brands to utilize the concept, while others may need to think of "long-time" story arcs that play out over a series of exposures that are experienced by a user "cumulatively."

This may be especially true of the kind of "conversational marketing" that Say specializes in.

In one of these real-time conversational ads, for example, Say arranged for a popular technology blog, TechDirt, to host a conversation around tablet computers, which was sponsored by Asus. The real-time conversation between TechDirt's blogger, and the blog's readers, was fed into the ad continuously as it happened, including question-and-answer conversations, mini polls and other interactive and interrogative features. All within the standard pixels-by-pixels frame of a standard banner ad, but dynamically, and on-the-fly.

Given the dynamic, real-time nature of social media, it's not surprising that many of the nouveau riche media platforms capitalize on it as a source of continuous, real-time content. One of the platforms participating in IPG Lab's "Real Time Rich Media" trial, socialmedia.com, specializes in it, and the other two, SpongeCell and WidgetBox, can enable social media feeds along with other dynamic, real-time data streams.

The trick, says Interpublic's Monahan, is finding the right real-time data that reinforces the brand's message and telling the right story around it. One thing that Monahan learned from the trial is that, when all those elements come together, real-time rich media ads generate substantially higher rates of consumer engagement and action than conventional online display ads.

The fourth quarter 2010 test, which involved four Interpublic clients - one each in the entertainment, technology, retail and finance categories - that ran ads across each of the three platforms participating, found much higher levels of engagement, click-throughs and "brand lift" (as measured by an independent research company, Knowledge Networks' Dimestore).

"The findings were pretty consistent across all the [real-time rich media ads]," says Monahan. He adds, "We knew this would happen going in, because we believed in the technology, but we needed a fairly comprehensive piece of research on how it would impact specific brands, for specific advertisers in specific categories. And now we have that, and we are taking it to the other IPG agencies and their clients."

While Pictela hasn't conducted a similar test of its platform, AOL is taking it on the road as part of its "Project Devil" initiative to reduce the amount of clutter on its pages, improve the experience of its users and boost the effectiveness of its ad impressions for advertisers. If it does that, AOL believes it can boost the share of advertising budgets it gets as well as the premium it charges advertisers. And maybe, just maybe, begin to draw advertising dollars from Madison Avenue's other favorite, dynamic storytelling medium - television.

As Pictela's Rogers notes, you can talk all you want about technology, including the cloud or megabits-per-second, but the bottom line is whether the nouveau riche can do something better for online publishers and advertisers, and ultimately, he says, that is about making the "ad experience more relevant to the consumer."