A Banner Decade

In October of 1994, Zima, Club Med, AT&T, and other brands paid to place 468×60-pixel “banner” advertisements atop the pages of HotWired.com’s website. It was the genesis of online advertising as we know it. A decade later, according to the Interactive Advertising Bureau and PricewaterhouseCoopers, U.S. advertisers spent $9.6 billion on online advertising — an amount greater than the whole outdoor advertising industry, about 80 percent the size of the magazine ad industry, and half the size of the radio ad industry. Moreover, online ad spending grew 31.5 percent from 2003 to 2004, three times faster than any other U.S. advertising industry, and seems to be growing even faster this year.

All this is part of the perspective detailed in “The Decade in Online Advertising, 1994-2004” (PDF format), a retrospective analysis published today by DoubleClick, with contributions from Nielsen//NetRatings. Authored by DoubleClick director of research Rick Bruner, the retrospective makes three key conclusions about where online advertising is trending:

(1) Despite some gyrations, it has become a seller’s market. (2) Marketers are demanding even more accountability. And (3) consumers are using online technologies (such as TiVo and pop-up blockers) to take more and more control over how, when, and what ads they see.

Backed by research, the report notes that printed newspaper advertising was the sector most hurt by the rise of online ads; shows how the rise of “rich-media” online ads is paralleling the rise of broadband; how for the first time in U.S. history the larger share of media companies’ revenues came not from advertising but from consumers’ direct spending on satellite, cable TV, and Internet access subscriptions and purchases of DVDs and videos; and that, quoting Proctor & Gamble global marketing officer and Association of National Advertisers chairman Jim Stengel, “We must accept the fact that there is no ‘mass’ in ‘mass media’ anymore.”