• by Christopher M. Schroeder , June 21, 2004

Whenever I need the best insight into interactive marketing, my first stop is Brian McAndrews, President-CEO of aQuantive. He and his team have built one of the largest and most important digital marketing services companies in the world, and created what have become industry standard technologies. That he started in a traditional media company as a senior executive at both ABC and ABC Sports underscores the breadth of his experience. I spoke recently with McAndrews about online advertising coming of age, the rise of Google and other threats and opportunities.

CS: By all accounts, Internet advertising's day has come. Are we out of the woods now?

BM: We are very pleased to see [strong] industry numbers. aQuantive's revenues have grown around 50 percent in the last two years and we expect similar growth this year. Marketers are no longer asking if they should spend money online, but how. Advertisers recognize that the media landscape is fragmented, and they know that consumer control is beginning to rule the day. Those two trends bode well for [the] interactive [industry] since our business is actionable and accountable. However, to find meaningful and sustainable success online, advertisers need a combination of expertise, technology and analytics.

It's also important to remember that the percent of ad budgets going to online advertising is far below the percent of media consumption time that consumers spend on the Internet. There is clearly tremendous opportunity to grow this industry.

CS: What can ruin the party? I'll dangle three possibilities for your reaction. First, ad-blocking software:

BM: It's clearly been embraced by consumers. However, the adoption of software that blocks all ads is very low. The user experience when all ads on a page are blocked is somewhat awkward. If we continue to focus on serving relevant messages while respecting privacy, ad-blocking software shouldn't be an issue.

CS: What about privacy legislation that bans cookies, or at least persistent cookies?

BM: There is spyware/adware legislation that mistakenly encompasses cookies, which could cause concern for our industry. It is our responsibility to continue to educate government leaders tackling complexities of the Internet. The Network Advertising Alliance (NAI) and its self-regulatory guidelines, applauded by the Federal Trade Commission, aQuantive and other industry leaders, are working as a coalition to help legislators understand the industry.

CS: Sites running out of quality inventory?

BM: Not at all. Today, leading companies in our industry are providing technology solutions that are turning "remnant" inventory into highly targeted, desirable media. Google's AdSense, Overture's ContentMatch and aQuantive's DrivePM are three of the solutions that are proving effective for advertisers and publishers alike. This category remains largely undiscovered for many advertisers, but I expect it to be an area of real growth.

CS: Anything else keeping you up late? Our industry today is justifiably confident, but it can be a short ride from confident to arrogant. We need to move forward with a long-term view of success, and avoid the short-sighted temptations that befell us in the darker days of the industry. We collectively need to remember that hard work and a single-minded focus on clients got us this far. We can't lose our hunger to succeed or our desire to exceed client expectations.

CS: How goes the future of branding online? Will marketers progressively do their own online "branding" on their own sites like American Express' Jerry Seinfeld webisodes or the Burger King subservient chicken?

BM: The best brands will consider all of these options. i-Frontier (an aQuantive agency) has done a lot of research into what works best for a given brand. Sometimes pushing site content out and affiliating the brand with leading publishers is the best approach. Other times, an immersive site experience works best. There are many strategies that can be used; the trick is knowing what works. The good news for our industry is that your question isn't 'will there be branding online?' Sophisticated marketers are beyond wondering that. That speaks volumes about how far we have come.

CS: What are your expectations in the future for enhanced targeting? Are privacy issues a concern?

BM: Given our intense focus on data and analytics, we're pleased with the industry's renewed interest in targeting technologies. We've seen again and again that anonymous, personalized and relevant messaging can provide meaningful lift to campaigns. ... Avenue A has long provided targeting solutions for its clients and continually tests new technologies in the market, including DrivePM, [products from] Tacoda, Revenue Science and ValueClick.

CS: There sure is a hell of a lot of search hype these days. Is the pay-for-performance model a separate offering for advertisers, or will it progressively dig into broader online ad dollars?

BM: Pay-for-performance media has become an important part of the online mix, and we expect that it will continue to grow. And we expect that PFP will continue to evolve downstream, from the cost per click models generally available in search, to more robust cost per sale models that further reduce advertiser risk. Advertisers want results, but don't necessarily want to build operational complexity [and costs] to achieve these results.

CS: So, are you going to buy Google's stock?

BM: I am not at liberty to discuss any rumors that aQuantive may acquire Google!

CS: What are you excited about these days?

BM: Data integration. Having serving, management and reporting integrated across web media, rich media, video and search is a big win for these advertisers. Digital video ... combining sight, sound and motion with the accountability of online is very exciting. We see 2004 as the year video really arrived for online users, but we're probably still a year off for advertisers. There are some compelling video ad opportunities today, but we don't expect to see significant growth in this ad category until 2005.