Beefing Up Banner Ads

In October 1994, Hot Wired ran the first Web banner, an ad placement for AT&T carrying the promise of a new era with the message, “Have you ever clicked your mouse right here? You will.” In the ensuing time period, the banner has generated billions of dollars in revenue but has also come to be seen as a symbol of failure. Its place as the pre-eminent form of Web advertising was eclipsed in 2000 when Google borrowed the paid search advertising system pioneered by Overture and turned it into a moneymaking machine. Since then, the display advertising business has played second fiddle to search, despite the fact that search pages make up only a fraction of Web traffic.

That situation is slowly changing. A new Web ad architecture is developing that promises to remake how advertising is bought and sold, borrowing the best of paid search auction systems while going beyond their targeting to allow advertisers to show each ad only to the audience they want. The automated exchanges, fueled by vast amounts of Internet user data, provide promise and potentially peril to all parts of the industry, from clients to agencies to publishers. “It’s going to facilitate a lot of brand dollars coming online because they’ll be able to buy audience — and right now it’s really hard for them to do it at scale outside of a few portals,” says William Morrison, an analyst with ThinkEquity.

Beefing Up Banner Ads.

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