Last week, the Interactive Advertising Bureau reported that for the first time since 2000, two consecutive quarters saw increases in online spending increases. Does it mean the medium is out of the doldrums? The experts are optimistic. Greg Stuart, CEO of the IAB, says he's confident this increase is "indicative of a larger trend at work. Of late, major marketers such as McDonalds have announced they intend to pour more dollars into the interactive space, and I'm certain their counterparts and competitors are also too smart to ignore that interactive is an integral part of the media mix." The operative word across the board seems to be "integration" Michael Drexler, Optimedia's Chief Executive Officer, says, "I think that the Internet and the organizations associated with the Internet have made remarkable progress to move the whole area ahead. And I think they've finally now have reached a point where a lot of the requirements, in terms of being able to evaluate the internet along with traditional media, are virtually there." Drexler, much like many of his colleagues in the advertising media industry, is seeing a shift in traditional advertisers' opinion of the Internet. "What we're finding is that a lot of the traditional advertisers are asking more and more about the Internet as an integral component and how it can be integrated with traditional media. I find that happening quite a bit, accelerating," he says. According to Drexler, the challenge for media agencies now is "to figure out how to make sure the Internet is no longer an isolated community and that the people who are involved and who have gained the expertise are now involved and part of the whole media planning process." Fred Rubin, SVP iDeutsch, says that these days, "When we present plans to a prospective client today we present them as part of a comprehensive package," which is a step in the right direction. "I think there used to be the sense that people who were selling the Internet were trying to sell the client on the fact that his current advertising was bad," Rubin says. "That turned a lot of people off," he says, because the Internet "was never the answer to everything," but it is a matter of "the left-brain and the right brain coming together on the client side. People are starting to see the data that speaks to the value of Internet advertising. And the creative continues to improve." "The resentment is starting to wear off," Rubin says. ""I feel like we've suffered from the hype long enough. The IAB numbers are the latest in a series of leading indicators that show that we're coming out of the tunnel." Rubin also expects pharmaceutical companies to be among those leading the Internet ad comeback. Some experts are quick to bring up the concept of growing pains, even as severe as those of the last 2 years, and point out that the interactive medium is less than ten years old with a bright future in front of it. Michael Zimbalist, Executive Director of the Online Publishers Association, says, "I think we're at the moment in time where television was in the mid 50s. What lies ahead is a generation of consumers that grew up with this as part of their media landscape. The medium right now is fueled by actual operating cash from companies that are showing good results. What lies ahead is a bigger medium than any of us could imagine. "Kids are integrating it into their lives. 97% 12-15 years old were online last week. By the time they're college age and entering the work force they'll have been online for 10 years. They're not just experimenting anymore. The shakeout is behind us," Zimbalist says, adding that the medium is actually seeing growth rates right now. "The underlying market is growing," he says. "If you factor out the spending that was pure dot-com and use that as your baseline you'll see more steady endemic growth." That's not to say the medium can rest on its survival laurels just yet. As Drexler puts it, the media industry as a whole now needs to "make sure [the interactive medium] is evaluated alongside traditional media and the budgets that are allocated are allocated accordingly. It's not about picking up crumbs. It's about looking at [the internet] from a zero-base plan and seeing where it fits in."
comScore Networks on Tuesday released the results of a study detailing broadband usage and quality of service, which shows that while consumers are increasingly willing to pay for a faster connection, there is little consistency in the actual network speed delivered by cable modem and DSL providers. comScore data reveal that the number of Internet users accessing the web though a broadband connection at home has increased by 9% in just six months (March 2003 versus October 2002). This compares to a decrease in dial-up users of 2% in the same period. In March, fully 28% of all home Internet users accessed the Internet via broadband connection. One of the most attractive benefits of broadband is a superior connection speed. But interestingly, comScore has found that throughput speed varies greatly by the type of broadband connection. In fact, contrary to a widely held belief, the average cable modem connection was more than 50% faster than the average DSL connection. Moreover, comScore found that connection speed also varies significantly across broadband providers. "Packaged services and discount incentives offered by broadband providers have had a major impact on establishing a strong base of initial customers," said David Shipps, vice president of Telecommunications Solutions at comScore Networks. "But in most geographic areas, competition between multiple providers has created intense pricing pressure, so performance metrics such as connection speed are likely to become an increasingly important factor, both for consumers selecting a broadband provider and as a part of providers' sales and marketing efforts." As the Internet shifts in content from predominantly text and static graphics to streaming video and other bandwidth intensive media, connection speed will become an increasingly important determinant of the quality of a user's experience. In order to maintain a satisfied and loyal customer base, broadband providers need a clear understanding of the performance of their network - and their competitors' networks - at the user level. "Recent announcements by major media companies introducing new bandwidth intensive services targeted specifically at broadband users are an indication of a major shift in the type of content available to Internet users," said Shipps. "As consumers seek to fully utilize the dynamic and interactive potential of the Internet, they will increasingly demand faster connection speeds and a higher quality of service."
Email security provider MessageLabs, which monitors email messages for companies worldwide, reports that of the 104.91 million email messages it tracked in March 2003, roughly 38.1 million were spam messages. This means that more than 36% of all email to business in-boxes is considered spam. Meanwhile, a Kansas businessman was awarded $500 in damages, plus $51 in court costs, by a small-claims court for receiving an unsolicited email advertising a business-analysis tool from Naperville, Ill.-based Market Advantage Consulting. (In violation of the Kansas Commercial Electronic Mail Act, which requires bulk emailers to include "ADV" in the subject line of commercial email and to include a physical address or phone number in the message.) Hummm. Let's see, yesterday I got 224 emails. If 36% were "unsolicited," that's 80 spammers I could go after. At $500 a hit (less $50 in expenses), I could earn a nice living off $36,000 a day. As ISPs and net-based email providers scramble to block as much spam as they can (with mixed results, since the Nigerian oil guys still know where I am,) consumers are beginning to think that anything that appears in their inbox that's NOT from a friend, relative or business associate is spam. Increasingly, consumers are hitting delete before they even access messages, even if it might be well worth their while to open. As more websites install audience management systems that allow them to collect user navigation and demographic data and merge them into audience segments of critical mass for marketers, targeted emails will become an important part of the marketing mix. These will not be "bulk" messages harvested from undifferentiated lists by third parties, but personalized messages based on preferences inferred from or expressed by users. They will be automatically generated by the publisher's own internal lists. This means they will be sent from a trusted source, a site with which the consumer has a relationship. The next step in removing the stigma attached (so to speak) to emails is for trusted sources to deliver a mix of content and commercial messages. Audience management enables publishers to target based not only on demographic information but navigation or content consumption patterns. So, if, or example, if I am an investor news site like Kiplinger.com launching a specialty investment e newsletter, I can send a sample of edit to men and women who have recently visited my financial news section, or entered my weekly poll, or are using my portfolio tracking tool. Now from a trusted source (Kiplinger) I am getting content (newsletter) about something that interests me (specialty investment). Down the road you can use email to sell me products and services from your advertisers, but ONLY if they track closely with my interests. That way I will know that you value my relationship with you and that an email from you is worth opening.Adam Guild is President of Interep Interactive.