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Online Advertising Articles
(March 2001)



NYC Court Kills One 'Cookie' Suit Against DoubleClick (internet.com, March 30th)
The industry-leading online ad firm came under fire last year by privacy activists who were concerned about their use of cookies and personal data. One of the cookie-related class action suits has been won by DoubleClick, creating a groundbreaking precedent.

EMachines Hit By Web Advertising Slump (TheStandard, March 30th)
Troubled discount PC maker, EMachines has announced a restructuring effort that will reduce its dependence on online advertising, and strengthen its links with ISPs. This is in response to the declining market for online advertising.

Are the Days of Free Over? (Wired News, March 30th)
Although there have been several article ralated to this issue appearing within our web development articles index, it is relevant here also. This article questions the future of the 'free' internet in the absence of the ad dollars that were so abundant during 1998-99. Clearly, several major content sites will be forced to switch to subscription-only models in order to survive and maintain a conguent quality level.

Pay to Play (eMarketer, March 29th)
What's clear to the publishing world, but seemingly not to many consumers, is that the creation of original online content costs money. As a result, in order for the Web to continue to function as it has been, sites need to extract revenue either from advertisers, or directly from consumers. At present, many consumers seem to hate banner ads with a vengeance. As this article indicates, though, if users are unwilling to accept advertising-support (in the way that they do with radio, TV and print publications), content sites will increasingly be forced to move towards a user-pays support model. Read more about this development, including a few figures pertaining to the popularity of subscription models within both the consumer and producer camps, here.

Internet Companies Try to Save Themselves (Excite News, March 29th)
Iconoclast Inc hopes to turn the internet economy around on the anniversary of the NASDAQ's sudden plunge, April 3rd. In order to do so, they're promoting a "Back the Net" day in which net users are asked to purchase a product, service or stock from a web-based company.

NetZero to Launch Mobile Ad Platform (internet.com, March 29th)
ISP NetZero is moving into unchartered territory with the development of ad ad-sewrving application to run on Qualcomm's platform on CDMA mobile devices. The system will enable advertisers to target their ads according to location, while tracking user responses and rewarding mobile application publishers.

Email Marketing: CPM, CTR, CPA, Etc. (eMarketer, March 28th)
This article outlines the average market rates attached to various models of email marketing. It outlines CPMs demanded by direct marketing, and various genres of opt-in interest marketing, while also breaking down the proportions of ads bought on a CPM, CPC and CPA basis.

Struggling Engage Inc to Sell Web Measurement Business (MSNBC, March 28th)
CMGI-backed Engage have been through a rough patch lately. Like 24/7 Media, this online advertising firm saw its stock price rise to a high of above $60 during the dotcom boom, but now sits well below $1, and is quickly burning cash. This article notes that the company has agreed to sell most of the assets relating to their website measurement business in an effort to raise cash while cutting costs.

Offline Brands Turn to "Advertgaming" (internet.com, March 27th)
Just as mini-sites have been used online to great success for firms such as Adobe and McDonalds, a few major offline brands are now incorporating cross-promotional web games into their marketing campaign. These work by encouraging players to pick up codes or CDs offline, and incorporating these into an online gaming environment (which is littered with ads promoting the brand). This article illustrates two such ventures, launched by the Miller Brewing Company and Sony Pictures Entertainment.

DoubleClick Admits Servers Were Hacked (internet.com, March 26th)
Although DoubleClick has confirmed that a vulnerability within its IIS4 servers allowed an intruder(s) to gain access and uploading privileges to two of their servers, a spokesperson from the company claims that no personally-identifying information was jeopardised. Nevertheless, the fact that patches has existed since last year related to the plugging these vulnerabilities paints a negative portrait of the company's dedication to server security. Read another report on this issue here. Update: DoubleClick's servers have reportedly been hacked for a third time within a week.

Sites Slow to Comply With IAB (AdWeek Online, March 26th)
While the IAB's new ad sizes were much-anticipated, a study conducted by Jupiter Media Metrix has found that adoption of the larger ad spaces has been slower than expected.

Dot-com Deadpool Seeks Nonprofits (CNET News.com, March 26th)
Controversial business site that primarily highlights the downfall of dotcoms, F***edCompany.com, has announced that it will be donating its unsold ad space to nonprofits. What this article fails to note is that literally 1000s of sites before this have sent their default inventory to nonprofit-server AdCouncil for years.

Big AOL Pitch to Ad Clients is Clicking (NY Daily News, March 26th)
Newly formed media giant AOL Time Warner have been wooing advertisers with flexible ad deals, and access to the benefits afforded by cross-promotional campaigns. The company sees strong growth from ad revenue throughout this year, and is offered protection from the problems facing other online properties through its subscriber-based revenue and Time-Warner content production arms.

Big 3 Explore Online Exchange (AdWeek Online, March 26th)
The three largest advertising holding companies; Omnicom, WPP Group and The Interpublic Group of Cos. have proposed the creation of a standard online platform to facilitate media buying, while reducing the overheads associated with traditional channels.

Rethinking the Internet (BusinessWeek Online, March 26th)
What's desperately clear at this juncture is that the net's seemingly limitless promise will, in some cases, not be realised and, in others, will take time to come to fruition as technology, society and business systems gradually adapt. This article notes many of the areas that truly have proven revolutionary, while hinting at others that could benefit significantly through the reach and efficiency of the net in the near term.

Advertisers Count on Oscar Lovers to Surf Site (USA Today, March 23rd)
Event site Oscar.com is bucking recent trends in online advertising by attracting a great deal of support from blue-chip brand names. Those surrounding the site say that pageviews are up 80% from last year, with ad revenues expected to grow 30%, to $1 million.

Net Whiz Offers 'No Opinion' on 24/7 Demise (NY Post, March 23rd)
Even 'Celebrity analyst' Henry Blodgett is confused about the future of also-ran online ad network, 24/7 Media. Following the release of the company's disappointing, delayed earnings report, Mr Blodgett has awarded the stock a farsicle "no opinion" rating. Regardless, the stock was punished in trading today, falling a massive 40% to close at 41 cents.

Armageddon for Online Advertising? (Washington Post, March 22nd)
Here, Leslie Walker makes the point that while many industry pundits have been questioning the future of online advertising, the lives of online media properties will be secured when they find the right balance between fee-based and ad-supported content.

24/7 Media Goes Into the Night (ZDNet Interactive Investor, March 22nd)
While 24/7's executive team have done their best to downplay their disappointing earnings report, industry-watchers remain doubtful of whether or not the company (which is presently trading well below $1, and who burnt through $20 million+ in cash last quarter) will ever manage to turn a profit.

Free ISPs Look for New Sources of Revenue (MSNBC, March 22nd)
During the hype-fueled landgrab of 98-99, several internet service providers arose that offered a free, ad-supported, service to budget-conscious web surfers. Their massive growth has not been matched by massive profits, though, and the softening ad market has forced many to nudge their users into fee-based services.

24/7 Media Reports Year-End and Fourth Quarter Financial Results (Yahoo! Finance, March 21st)
Following on from the thoughts mentioned in the article below, this feature presents figures from the company's earnings report in detail. It seems that while the company's fourth quarter results left a lot to be desired (and failed to meet analysts' expectations), the firm has managed to secure an additional line of credit that offers them a greater chance of survival.

Is 24/7 Media Out of Time? (internet.com, March 21st)
Although not news to many of the investment-minded amongst us, the future of also-ran online ad agency 24/7 Media has come under serious doubt of late. The delay of the release of their earnings report while they carried out negotiations to improve their cash position, coupled with figures indicating that the firm cannot stem its cash-bleed, means that unless acquired by an old media counterpart, 24/7 may soon face bankruptcy and liquidation.

DoubleClick to Cut Staff, Change Media Business (Yahoo! Finance, March 21st)
Although not entirely unpredictable, even industry leader DoubleClick has been forced to scale back its media division in an attempt to cut its losses. The company has announced that it will shave 10% of its staff, restructure its media division and increase their focus on its technology and data businesses. This is good news for their investors, but troubling to their publishers.

Financial Websites Buck the Trend (BBC News, March 20th)
Popular finance-related infomation and services sites, auch as The Motley Fool, Raging Bull, TheStreet and CBS MarketWatch have not only reported traffic growth over the last year, but mention in this article that they're still seeing strong advertising support.

Marketeers Prefer Email to Banners (BBC News, March 20th)
The results of a survey that questioned more than 400 UK-based marketing managers highlights the low-priority given to banner ads in many a marketing strategy. What is truly shocking is that only 3% of respondents saw banner ads an effective means of customer acquisition. Email marketing and website development, however, rated well.

Snowball.com to Reduce House Ads, Make Inventory "Less Predictable" (internet.com, March 19th)
In a desperate final gasp for survival, entertainment network Snowball.com has announced a major shift in its online advertising strategy. It will attempt to increase audience and advertiser interest in the ads that run throughout its network by creating scarcity, while increasing the size of each creative. They also plan to introduce a new timed interstitial format that works much like a television ad, forcing users to watch a few seconds of an advertiser's message before proceeding.

Groups Issue Online Ad Terms, Conditions (Newsbytes, March 19th)
The American Association of Advertising Agencies (AAAA) and the Internet Advertising Bureau (IAB) have united to create a set of terms and conditions that online ad agencies and media organisations are encouraged to follow in the formulation of their contracts. The suggestions cover such issues as consumer privacy protection, insertion orders, ad placement and positioning, payment liability, cancellation policies, indemnification, etc.

Baking the Net into Their Lives (BusinessWeek, March 19th)
As pure-play etailers and ad supported content sites continue to collapse around them, AOL has championed the notion that multiple revenue streams are key to survival in the rapidly-evolving and hugely competitive online environment.

If Yahoo! Can't Do It, Who Can? (ZDNet, March 18th)
This article argues that Yahoo! is a guiding light in how investors, entrepreneurs and advertisers alike perceive the health of the online advertising industry. The suggestion here is that Yahoo's revenue warnings are reflective of the entire industry's desperate struggle for ad dollars. Another important issue raised within this article is the fact that if, God forbid, Yahoo! was to go under (highly unlikely at this stage, but anything's possible in this climate), the ripple effect would likely mark the death of several other online firms dependent on Yahoo! for traffic.

AOL Time Warner: Who's Laughing Now? (BW Online, March 17th)
While the user-friendly American ISP has come under fire throughout its development, growth and the high-profile merger it announced with the mega-media brand last year, AOL - now AOL Time Warner - seems set to see success above and beyond that of their ad-dependent competitors. What's more, since the brand is now strong within both the tech and entertainment/media sectors, the company is expected to lure comparitively more advertisers towards its properties than pure-play internet portals/destinations such as Yahoo!

Mergers May Not Be Able to Save Minority Web Sites (Excite News, March 16th)
There's no doubt that many online niche networks will be forced to consolidate in order to survive and to avoid becoming an also-ran on the Internet landscape. Several analysts have stated that such mergers may not be enough to ensure the long-term survival of niche sites. Additional criticism has come from the users of such sites, who fear that consolidation will create virtual monopolies that keep advertising rates high, while reducing the variety of voices and viewpoints expressed online.

Business.com Rides the Shakeout Wave (CNET News.com, March 16th)
Best known for the massive price-tag accompanying the purchase of its domain name, Business.com has suffered like all other major ad-supported properties through the market downturn. Here, CEO Jake Winebaum expresses his optimism for the medium over the medium-long term, and states that those who can survive the shakeout will prosper.

Kournikova Charges the Net in $10 Million Lycos Ad Deal (USA Today, March 15th)
With most online properties pulling back from their agressive marketing campaigns, the Lycos portal sees the benefits of launching a high-profile ad campaign during the tech drought. During the height of America's period of "irrational exuberance" in 98-99, flashy dotcommers burnt through millions each month in an attempt to rapidly establish brands and market share, causing ad space to become cluttered with confusing ads for little-known firms. Now that the clutter has cleared, Lycos will be leveraging the image of its most-searched-for sporting star to promote its services through a massive television, print and online ad campaign.

ICQ Logs Spark Corporate Nightmare (CNET News.com, March 15th)
Anyone who regularly participates in webmaster forums will be well aware of the controversy that has arisen recently surrounding eFront. An anonymous hacker broke into the company CEO's personal computer and copied his ICQ logs. Contained within were many scathing criticisms of their affiliate sites, as well as other explosive discussions about the company's outlook. Here, News.com talk to CEO Sam Jain, who admits that the logs are genuine, adding fuel to the fire that had been considered largely speculation up until this point. This is worthwhile reading for any publisher who has considered selling their site to an advertising partner.

Google Searches For Dollars (Forbes.com, March 15th)
With portal leader Yahoo! issuing an earnings warning recently, the squeeze is now on for search technology posterchild Google to prove that it can become profitable. The search engine currently develops about half of its revenue from licensing its technology to partner sites, while the balance consists of revenues from their text-based advertising program, Google AdWords.

ClassMates.com: Entrepreneur of the Year (ClickZ, March 15th)
Employing guerilla marketing tactics, centering around low-cost remnant banner buys, Randy Conrads has built a multi-million dollar pure Web play out of childhood nostalgia.

Blodget Sees Declining Ad Market in 2001 (UpsideToday, March 14th)
Just months after predicting a flat year for online advertising, with a probable uptick near the year's end, Merrill Lynch's Henry Blodget has downgraded his outlook for the industry in the wake of bearish announcements made by Yahoo! and CNET. He stated that there would be a few victors - such as those whose focus remains on building market share and offline alliances (such as AOL Time Warner) and those who are basing their advertising models on direct marketing or performance-based systems (such as DoubleClick and GoTo.com).

CBS MarketWatch.com Jumps On Revenue-Hunting Bandwagon (internet.com, March 14th)
In a dramatic move, content-based MarketWatch.com has been redesigned to be more accommodating to advertising, including an innovative new 'wallpaper' format that plasters an advertiser's creative across the entire background of the page. Read more about this development here.

CMGI Surviving on Fumes From Internet Heyday (Excite News, March 14th)
Once the darling of Wall Street tech investors, CMGI's stock value has dropped more than 95% from its high. ALong the way, they have cut their staff by 25% and dropped many of their business interests. Even now, the firm is in risk of burning through their existing cash reserves before reaching profitability, which puts firms such as the CMGI majority-owned Engage at risk.

Small Sites Upset by GoTo.com Rate Hike (CNET News.com, March 13th)
By hiking its minimum-bid price by 500% and enforcing minimum monthly expenditure rules for all of its keyword-purchasing advertisers, GoTo.com has been greeted with a great deal of frustration by those web publishers and small businesses who see no value in conforming with the new regulations. GoTo has expressed that the move is necessary in order for them to cut their overheads in a move towards profitability. Read further discussions about this move here.

Vertical Banner Use Surges in Fourth Quarter (The Mercury News, March 12th)
With advertisers looking for greater response rates and publishers looking to increase their revenues, vertical (or 'skycraper') banners grew rapidly in popularity during Q4 2000, despite having yet been standardized by the IAB. This article quotes from a Media Metrix report stating that the average CPM rate that these spaces command is about twice that of horizontal banners. For more information regarding this story, check out InternetNews.com's article here.

The Great Flameout (TheStandard, March 12th)
This fantastic 4-page article effectively illustrates the state of online advertising from the points-of-view of publishers, agencies and advertisers. As well as summarizing issues concerned with the effectiveness of the banner, the decline of dotcom marketing budgets and the worldwide economic slump, the article suggests that the main reason that online advertising is trailing many other media forms despite its great reach and accountability is simply because marketers don't know how to treat the medium. They have been so used to using TV, billboards and print media that their mindset has not yet accepted online advertising as a valid component of a well-rounded campaign.

Finding a Future in Digital Ads (TheStandard, March 12th)
Despite the IAB's decision to create new ad sizes, and despite the fact that many forms of online advertising have proved effective over the years, many analysts are doubtful that the market will grow at the substantial rate earlier predicted. This report features a variety of graphs and other data from major research firms that illustrate the predicted growth of online spending by various advertisers.

Marketers: People Embrace Pre-Approved Email Pitches (Boston Herald.com, March 12th)
With banner ad response rates lower than ever, and email response rates continuing to perform well, personalized opt-in email marketing is on the verge of seeing huge growth.

Engage Out of the Woods? (internet.com, March 12th)
During an announcement made on Monday evening, Engage noted proubly that they had cut their losses from last quarter, despite the market slowdown. They outlined the savings that would be made through their corporate restructuring and renegotiation of international media contracts. They also stated that the company would become profitable during fiscal Q1 2002.

The Relationship Is the Brand (ChannelSeven, March 11th)
When issues surrounding the industry's financial outlook outweigh questions about its effectiveness as a marketing medium, companies looking to succeed online should focus on customer relationship management, rather than obscure concepts such as broad-based branding, suggests ChannelSeven's Pamela Parker.

CMGI Chief Thinking Smaller (Boston Herald, March 9th)
David Wetherall, high-flying CEO of internet holding company CMGI has stated his concerns about the short-term outlook for internet advertising, while maintaining a bullish outlook for the future. He also says that the firm is looking to consolidate its 11 companies into 5 strong performers. CMGI holds a controlling interest in online ad network Engage.

HotJobs Jumps on Affiliate Bandwagon (internet.com, March 9th)
The bulk of this article is simply a press release for touting the relationship between HotJobs and CJ, which strangely suggests that their pay-per-lead program is somehow unique. In any case, the article is a worthwhile read due to some of the statements made about how such accountable results-based marketing is simply another weapon in the overall advertising and branding campaign for this major employment resource.

Can Dot.Coms Make Money From Advertising? (BBC News, March 8th)
A fantastic summary of many of the thoughts expressed since the Yahoo! announcement. This article notes that now even solid internet companies are at risk of low ad returns, with traditional advertisers moving online at a slower rate than expected.

Yahoo's Ad Ache (CNET News.com, March 8th)
Check out this special feature from CNET for a round-up of the site's coverage of the recent Yahoo! announcements, and the effect that they have had on the industry at large.

DoubleClick Shrugs of Yahoo! Comparisons (CNET News.com, March 8th)
In an effort to stem the decline of his company's stock price, DoubleClick's CEO Kevin Ryan spoke out recently to defend his company against the investor backlash that has struck many advertising-based internet companies since the Yahoo! announcement. As well as stating that his company sees the ad market picking up in the near-term, he noted that DoubleClick only derives 20% of its revenues from ad sales; with the balance coming from its technology and direct marketing efforts.

Europe's Net Picture Brighter (Wired News, March 8th)
While the US online advertising industry is currently seeing it's slowest historical period of growth (or decline), European net companies are seeing a far stronger market. This article suggests the reason for this is that Europe adopted the Web at a slower rate, European advertisers and publishers alike have learnt from many of the mistakes made by their pioneering American counterparts.

Xerox Betting on BeFree Affiliate Program (internet.com, March 8th)
The high-profile copier company has announced that it will be cranking up its e-commerce exposure by launching an affiliate program through BeFree that will offer between 1-4% commissions for affiliate sales of various copier hardware, accessories and supplies. They aim to attract 10,000 individual affiliates within the next 12 months.

Internet Media Stocks Crumble After Yahoo! News (Excite News, March 8th)
This article further illustrates the dire straits for pure-play internet stocks, while claiming that the present market does hold excitement on some fronts - with DoubleClick ready to acquire competitors to secure its market share. It also illustrates that those who did diversify their revenue sources, such as AOL-TW, have been better equipped to weather the storms.

Yahoo's Bad News Suggests Trouble for Other Companies (Excite News, March 8th)
When Yahoo! recently announced that it would be losing Tim Koogle as CEO, while simultaneously cutting their revenue estimates to a break-even level, the online economy shuddered. Reports released by Yahoo and industry analysts have claimed that the troubles ailing dotcoms could not have come at a worse time - with traditional advertisers also cutting back on their marketing expenses and experiments as a result of the general economic downturn. This article outlines the present climate as seen by investors and many advertisers, which is troubling indeed.

Mediapassage Completes Merger with OneMediaPlace (NET-ADS, March 7th)
Today Mediapassage, the leading provider of e-commerce solutions for the planning, placement, and payment of ad media transactions, and OneMediaPlace, an online service specializing in front-end planning and purchasing functions for a range of media channels, have announced the completion of the merger of their two companies. It has also been announced that the name of the merged company will be Mediapassage.

Start-up Clicks into US (Australian IT, March 6th)
Australian-based affiliate program provider, clickGalore, has announced that it will be entering the US market with gusto in an attempt to challenge market leader CJ for the top spot. Reads like an over-blown press release, but is a fitting introduction for this little-known Aussie firm.

Mediapassage Absorbs Slimmed-Down OneMediaPlace (internet.com, March 6th)
In a move designed to combine OneMediaPlace's front-end planning and purchasing functions and their strength in Web and outdoor media with Mediapassage's back-end systems for print and broadcast media, Mediapassage recently acquired OneMediaPlace. The combined company will operate under the name Mediapassage.

Company Offers Method of Blocking New Ad Sizes (ISPworld, March 6th)
The CEO of interMute, a company that has based its business on selling ad-blocking software has struck out (with a self-touting press release) in response to the IAB's decision to support larger ad sizes. His statement that, "Their goal of making the Internet a more effective marketing medium we believe is inconsistent with why people want to use the Web." basicly sums up the hypocrisy of this article. That is, Mr English is using the Internet to market his software, in order to stop other companies being able to market their wares via banner ads. Read some comments about the hilarious claims made by Mr English's company here.

UGO Networks Closes $23 Million Round of Funding (Net-Ads, March 5th)
UGO Networks, a leading entertainment company for 18-34 year old males, announced today that it raised $13 million dollars, closing a new round of funding with a total of $23 million. Interestingly, this comes at a time in which UGO is being heavily criticized by its affiliate partners for withheld payments, unsold inventory and poor support.

DoubleClick Rolls Out Better Method for Ad Tracking (Excite News, March 5th)
In an effort to more accurately gauge the spending habits of visitors to DoubleClick sites, the industry-leading ad firm is to track surfers on a permission basis to monitor how much they spend online, and what products/services they buy. This promises to both increase the ad rates that DoubleClick can command for such targeted profiles, and rise the ire of privacy advocates.

Fear and Sending (eMarketer, March 5th)
Email marketing is continuing to see strong growth in usage and spending, but some recent high-profile email blunders reveal some of the weaknesses of the medium.

Direct Marketers Move on to the Web (eMarketer, March 5th)
If any business was tailor-made to the Web, it is direct marketing. New figures released by the Direct Marketing Association reveal that most marketers are aware of this, since 965 of those polled have established a web presence for themselves and 85% use online promotions to drive traffic to these sites.

Famed Disasters: Hindenburg, Chicago Fire and Banner Ads (Advertising Age, March 5th)
Here, Randall Rothenburg has taken a few meaningless statistics and put together a misinformed thesis about why banner ads should rank amongst the great disasters of the modern age. For some reason, he seems to believe that a small banner's measurable response rate should be as high as those seen through expensive, personalizes and information-rich direct mailings - ignoring the fact that banner ads are more akin to newspaper or magazine spots, some of which are used to solicit responses, while many are placed purely for branding purposes. Read comments about this article from a variety of publishers and advertisers here.

24/7 Media Talking Possible Acquisition (internet.com, March 2nd)
It's no secret that 24/7 has been in dire straights since the tech crash. It's stock price is floundering, and the firm last week announnced that they would be delaying the release of their earnings report while they negotiate deals aimed at enhancing their cash position. Now, 24/7 Media's Tom Detmer has expressed in an interview with internet.com's Internet Advertising Report that the firm is actively seeking a buyer from the traditional ad world.

Government Website New territory for Advertisers (Excite News, March 2nd)
Banner advertising is making inroads onto goverment-run websites. This action, while beneficial to the organizations in question, has been criticized by many who are concerned about consumer privacy.


 
 
 

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