Ad Execs: Web Must Mature To Gain Market Share

Before the Internet can capture a larger proportion of ad dollars, technology and measurement systems must improve, advertising executives at Media magazine's 2006 Forecast said Monday.

"If we were to go from $13 billion to $30 billion, I think the system would break," James Spanfeller, CEO of Forbes.com, told the audience at a panel discussion about digital media.

Current estimates by research firm eMarketer have online ad spending growing by 33 percent this year, to reach $12.9 billion; that figure represents 4.6 percent of all ad spending.

Scott Ferber, CEO of Advertising.com, agreed that the Internet isn't yet capable of absorbing large-scale media buys. In fact, he said, it's "impossible" to make a large streaming video buy online, in part because the serving and measuring techniques are too inconsistent. "It's hard to get that stuff going," he said.

Peter Naylor, senior vice president at iVillage, added that before online advertising can significantly grow its market share, the industry must first attend to the "boring but important stuff"--such as setting uniform standards for online ads and measurement.

Spanfeller also said that advertising online won't reach a turning point until industry executives are convinced that consumers watch video on the Internet. "There has to be a perception that lots and lots of people are watching video on the Web," he said. Only after that occurs will the flow of ad dollars significantly shift online, he added.

But David Moore, CEO of 24/7 Real Media, argued that despite the complexity of purchasing online media, the category's transparency and accountability gave the Internet advantages over traditional media.

Panelists also said that growth in online advertising is coming at the expense of newspapers, particularly classified ads. In addition, said Spanfeller, the speed at which news appears online has hurt more traditional media. "The more frequently something is produced, the more disruptive the medium," he said.