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Internet Advertising: One Face or Many?
By Sally J. McMillan
Manuscript prepared for
Internet Advertising: Theory and Research (2nd edition), David W. Schumann & Esther Thorson
March 12, 2004
Contact information:
Sally J. McMillan
476 Communication Building
University of Tennessee
Knoxville, TN 37996
Phone: 865-974-5097
E-mail: sjmcmill@utk.edu
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What is Internet advertising? Before the question can be answered, it must be broken
into parts. First, what is the Internet? It is the “network of networks” that operates on a set of
technical protocols that enables people from around the world to access and exchange
information using tools such as the World Wide Web, e-mail, chat rooms, etc. It began as a
project of the United States military establishment that wanted a communication system that was
robust and non-centralized. The communication protocol (TCP/IP) was in operation by the
1970s, but use was restricted to the government with the exception of a few academic
researchers. In 1993, the Internet burst into public consciousness with the development of the
tools that made the Web possible. This graphical interface made the Internet much more user
friendly and by the mid 1990s, many businesses and consumers began to use the technology
(Leiner et al., 2000).
The original question also begs for a definition of advertising. Recently, Richards and
Curran (2002) attempted to update the definition of advertising. After a series of interchanges
with advertising experts, they developed the following definition (p.74): “Advertising is a paid,
mediated form of communication from an identifiable source, designed to persuade the receiver
to take some action now or in the future.” By extension, it would seem quite logical to define
Internet advertising as any form of communication that meets the definition of advertising and
can be found on the Internet.
Sounds simple. But, of course, it is not. Internet advertising is a multi-faceted
phenomenon. True, the same could be said of many other kinds of advertising. Print advertising
comes in many colors, shapes, and sizes; television advertising might range from a simple 10second message to a long-format infomercial. Internet advertising has all those kinds of
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variations, too. But it also spans time and space (unlike print which is space bound and
broadcast which is time bound) and seems different in other fundamental ways as well.
Internet Advertising Characteristics
Let’s review the four key elements of that definition of advertising: It’s a message that is
mediated (rather than being communicated directly as in personal selling), someone who can be
identified pays for that message, the primary purpose is to persuade, and the action that results
from that persuasion may take place now or in the future. On first glance, this seems to fairly
well describe things that we associate with Internet advertising such as on-site banners and popup messages. But what about unwanted e-mail, which is known as spam? If the message is sent
directly to the consumer rather than being mediated through a content-based Website is it still
advertising or is it personal selling? What about optimizing a Website so that it comes up early
in a key-word search performed by a search engine? The developer didn’t pay the search engine
directly, but an agency might have been paid to make the changes to the Website code that gets it
top billing in a search engine. And if the site is easily accessible, it might lead to persuasion,
which is the primary purpose of advertising. What about corporate Websites – are they
advertising? They are definitely designed to communicate. They are often filled with
information that may not be directly targeted at immediate persuasion to act, but that might be
intended to improve the overall reputation of the company or some similar goal.
Perhaps the most perplexing question is whether sites that facilitate online buying are
advertising. In traditional terms, they are more like retail stores where we might find some onsite messages, packaging, presentation, and other tools that help sell products. But because the
Internet is also somewhat like other communication media, definitions get a bit fuzzy when the
consumer sees a site at the top of a search engine list (because it has been optimized to appear
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early in that listing), clicks on the link, reviews a wealth of information about the company and
the product, and makes a purchase – all at the same computer screen and within a matter of
minutes or even seconds.
Clearly, Internet advertising is different in some fundamental ways from other forms of
advertising. Researchers and practitioners seem to have identified four key differences. First, it
“compresses” the hierarchy of effects. Traditionally, marketers have talked about the need for
setting different kinds of objectives for advertising and marketing based on the notion that
advertising works on the communication aspects of the hierarchy (e.g. awareness, attitude) while
marketing works on the higher-level behavioral goals (e.g. purchase, brand loyalty). Advertising
traditionally took place in the media while the retail environment was the place to focus on
changing behaviors.
Of course, there have always been messages that exist in the “cracks” of this definition.
For example, direct mail does not use a traditional mass medium and is very much focused on
achieving a behavioral result. Nevertheless, it is often thought of as form of advertising – though
a very specialized one that uses different techniques than magazine or television advertising. But
on the Internet all the lines blur and compress. Banner ads might build awareness of a brand, but
they are most often also designed to encourage “click-through” to a Website that often sells the
products or services presented on the banner. Much of the early literature on Internet advertising
focused on the profit potential of this compression between message delivery and purchase (see
for example, Berthon, Pitt, & Watson, 1996; Bush, Bush, & Harris, 1998; Gugel, 1997; Li &
Coyle, 1997; Paul, 1996).
A second major difference between Internet advertising and other forms of advertising is
that the Internet was the first widely available consumer medium that enabled the sometimes-
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elusive properties of interactivity. The trade and popular press widely heralded the benefits of
interactivity starting in the 1980s, often without any definition of what interactivity is
(McMillan, 1999a, 1999b). Scholars have begun to focus in on what it means for a medium to
be interactive. While many definitions abound and many perspectives are taken on the topic,
there seems to be some growing agreement that interactivity is a multi-faceted concept that
includes two-way communication, a high level of user engagement and/or control over messages,
and timeliness of communication (Liu & Shrum, 2002; McMillan & Hwang, 2002). Thus,
Internet advertising has more capacity than most other forms of advertising to develop two-way
communication with consumers, engage the consumer, and present timely messages quickly.
Researchers have also examined intrusiveness, or lack thereof, as a unique characteristic
of Internet advertising. As Internet advertising was first developing, some felt that it lacked
enough intrusiveness to be effective. For example, McDonald (1997) noted that most advertising
appears during the breaks of television watching or as an intrusion into the reading flow of a
magazine. But the Internet message that is intended to persuade often is positioned at least one
click away from the banner, hyperlink, or other Internet advertising. In essence, the consumer
has to request the ad rather than having it intrude upon his or her life. But advertisers have
become clever at making their ads intrusive with tools such as pop-up ads that appear on top of a
message, pop-under ads that stay on a screen after the target Website is closed, interstitial ads
that “take over” the screen and so forth. Recent research suggests that these more intrusive
forms can lead to irritation and ad avoidance (Edwards, Li, & Lee, 2002). Thus the medium
offers advertisers the interesting challenge of how to lure customers to a selling message or
purchasing opportunity without encouraging them to invest in tools such as pop-up blockers that
can make advertising completely invisible.
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The fourth primary difference between Internet advertising and other advertising forms is
that the Internet has the capacity for highly personalized communication. This one-on-one
marketing potential was heralded as revolutionary in the 1990s (see for example Blattberg &
Deighton, 1991; Hoffman & Novak, 1996; Newell, 1997; Peppers & Rogers, 1993). Many
observers seemed to believe that both consumers and advertisers truly wanted to develop
personal relationships and that the medium would facilitate these relationships. The idea of
consumer relationship marketing is still strong, but the idea of personalization has broadened.
For example, Strauss and Frost (1999) point out that the Internet enables a new kind of
personalization that is built into the structure of the Internet use experience. For example, when
consumers create a customized “my.yahoo” page, they not only get personal news, weather, and
television listings, but also give the site owner insight into the personal preferences that might
lead to more targeted selling messages. Such personalization can also make sure that visitors to
online stores see the most appropriate and appealing messages (Kim, Lee, Shaw, Chang, &
Nelson, 2001) and have positive benefits ranging from improved attitude toward the Website
(Chen & Wells, 1999) to purchase (Chakraborty, Lala, & Warren, 2003).
Developing a Typology
In an effort to more clearly define Internet advertising, two research steps were taken.
First, the author reviewed articles related to Internet advertising that appeared in the scholarly
advertising literature from 1995 (the first articles were found in that year) to 2003. Key
advertising journals and proceedings (Journal of Advertising, Journal of Advertising Research,
Journal of Current Issues and Research in Advertising, Journal of Interactive Advertising, and
the Proceedings of the American Advertising Association) were systematically scanned for any
articles related to Internet advertising. Additionally, databases were used to search for the key
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words “Internet advertising” in peer-reviewed journals. This search led to articles in other
related journals such as Journal of Consumer Marketing, European Journal of Marketing,
International Marketing Review, and Journal of Marketing Communication. A total of 207
articles were reviewed.
The second research step was to conduct interviews with persons who are actively
working in the Internet advertising business. Agencies were identified from the American
Association of Advertising Agencies Website. A total of 222 agencies were found in the AAAA
listings that provide interactive services. An e-mail message was sent to all of those agencies
(see appendix 1) requesting that they provide a definition of Internet advertising and answer
related questions. Despite the fact that these agencies supposedly provide interactive services, email messages sent to 34 agencies “bounced” resulting in a valid sample size of 188. Of those,
33 (or about 18%) responded either by e-mail or by telephone and provided interesting insights
into how Internet advertising is evolving in the agency world. In most cases the respondent was
the person who is responsible for managing Internet advertising for the contacted agency. While
the response rate is relatively small, the author did not attempt to get more responses because it
became clear that a point of redundancy had been reached.
Table 1 provides a summary of the different types of Internet advertising that were
identified from both the academic literature and the practitioner interviews. The typology is
based on two primary dimensions. The first is location. Some advertising is placed in an
external environment (e.g. a news Website) while other advertising is in a context that is
controlled primarily by the advertiser. The second dimension is the purpose of the advertising:
some is designed primarily for communication (consistent with what are traditionally called
indirect objectives) while other Internet advertising is focused primarily on transactions (more
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consistent with direct objectives). Research suggests that there are four primary types of Internet
advertising based on intersections of these dimensions: brand-building messages, corporate
communication, direct-response messages, and electronic transactions. However, as the
following discussion illustrates, there may often be overlap among these types.
Table 1 about here.
Brand-Building Messages
Brand-building messages are probably what most people first think of when they hear the
term Internet advertising. They appear on the computer screen in “external” content such as
Websites and their purpose is primarily communication. Advertisers have proved that there are
many potential formats for these messages. They may be small buttons, or simple hyperlinks
from one site to another. These are most like outdoor advertising in the traditional media sense.
They provide a very brief message about the brand.
The ubiquitous banner ad has been the subject of many of the scholarly articles written
about Internet advertising (for a sampling, see Bhatnagar & Papatla, 2001; Chang, 1999; Chang,
Jung-Gyo, & Tharp, 2001; Dalhen, 2001; Hofacker & Murphy, 1998; Mitchell & Valenzuela,
2002; Shen, 2002). In many ways the banner is most like traditional magazine and newspaper
advertising in that it appears in the context of another message but it can be easily ignored
because it does not force exposure to the ad at a specific time. Both scholars and practitioners
have begun to examine ways to move beyond the simple banner to make ads more visible and
memorable (Brown, 2002; Dou, Linn, & Sixian, 2001). One approach is to make ads more like
television as they block out other content until they are attended to. Unfortunately, researchers
have also found that as advertising placed at Websites becomes more intrusive, it also becomes
less effective (Edwards et al., 2002).
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Practitioners frequently identified banners as a dominant form of Internet advertising.
But many indicated that the industry must move away from these formats that do little more than
transfer print and broadcast concepts to the Internet. For example one said: “with more than
20% of households in the United States now subscribing to broadband, cable services digitizing,
and the explosion of wireless devices, paid messaging via digital channels will continue to
expand, though they may have to evolve from the still-prevalent banner ad mentality.” Some of
that evolution was predicted to take place in terms of richer media. Full screen ads often enable
richer media such as interstitial messages that may seem like a broadcast advertisement that
interrupts the content.
Listings, which are often like directory advertising, were identified by practitioners as a
major component of marketing communication plans – especially for business-to-business
companies. Purchased placement, which is like traditional sponsorship and/or promotion, was
also seen as a key component of Internet advertising. This may take the form of sponsored links
from a Website to a shopping venue, such as Amazon.com, that result in a commission paid to
the sponsoring site for all sales originating from the hyperlink. Another emerging form of
purchased placement is “advergaming” in which a sponsor’s name is embedded in games (Youn
& Lee, 2003; Youn, Lee, & Doyle, 2003).
Finally, practitioners also identified several forms of externally validated content as part
of the brand-building potential of Internet advertising. These techniques often seem to be closely
related to offline practices that fall under the domain of public relations. Scholars, too, have
begun to realize that traditional definitions of the advertising and public relations functions are
blurring online and the Web also has the potential to change the relationships between
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advertising and public relations agencies and their clients (Bush & Bush, 2000; Daugherty &
Reece, 2002; Rodgers & Chen, 2002).
Corporate Communication
While the list of brand-building tools in Table 1 is extensive, brand-building is not the
only form of Internet advertising. Both scholars and practitioners are often adamant in declaring
that messages do not have to be “placed” in external content to be part of the Internet advertising
mix. Corporate communication messages are sometimes “pushed” to the client through channels
such as e-newsletters, electronic greeting cards, and opt-in e-mail messages. However, many
practitioners noted that great care must be taken to keep such tactics relevant to the user and thus
avoid being treated like spam. One practitioner observed: “We are not huge supporters of email marketing unless it is to the client’s customer list. Cold e-mail (not permission-based) is
spam in our opinion and we advise our clients to avoid it.” Scholars have given some attention
to these push techniques, primarily in the context of maintaining two-way communication with
customers (Martin, Van Durme, Raulas, & Merisavo, 2003; Park & Cropp, 2002).
It is the Internet’s ability to host large volumes of data that can be “pulled” at will that is
one of the biggest boons to the corporate communication type of Internet advertising. One
practitioner wrote: “The users of the Internet are actively seeking information. They are
‘pulling’ our advertising messages vs. the ‘push’ method advertising of most offline media.
When users are online they are usually seeking the information that the Internet has to offer.
This is the main reason why Internet advertising is different.” Singh and Dalal (1999) have
made a strong argument that the corporate Website is a form of advertising. Other studies have
also explored the Website as a form of advertising (Bruner II & Kumar, 2000; Doren, Van
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Fechner, & Green-Adelsberger, 2000; McMillan, Hwang, & Lee, 2003) and begun developing
advertising-like measures such as attitude toward the Website (Chen & Wells, 1999).
Corporate communications that are “pulled” by consumers are not limited to Websites.
Other forms include chat rooms, blogs, consumer reviews, bulletin boards, fantasy communities,
brand-related games, and Web casts. All of these forms of Internet advertising have the potential
to build relationships between consumers and brands.
Direct-Response Messages
Direct-response messages are summarized in the bottom left quadrant of Table 1. This
form of Internet advertising illustrates the sometimes-problematic nature of trying to categorize
advertising in a medium that is interactive, intrusive, personalized, and in which the traditional
hierarchy of effects is compressed. In essence, any brand-building message can become a directresponse message if it includes a call to action. The old distinction between brand advertising
and direct response advertising becomes almost meaningless on the Internet where a simple Web
address can become a call to action. One Internet advertising executive noted that at his agency
Internet advertising is organizationally structured as part of direct operations: “Even though it’s
part of our direct operations, it also involves a lot of brand advertising. The notion of ‘above the
line’ and ‘below the line’ marketing communication investment is just plain going away.”
Scholars also often make little or no distinction between the ability of messages placed in
online media to build brands and to generate actions such as click through (Broussard, 2000;
Chang et al., 2001; Choi & Rifon, 2002; Dahlen, Rasch, & Rosengren, 2003; Yoon, 2001).
Furthermore, researchers no longer have to question consumers about intent to purchase or take
some other action – instead they can actually observe and measure relationships between brandbuilding messages and direct-response actions (Ahn & Edwards, 2002; Gong & Maddox, 2003).
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Electronic Transactions
For many marketers, the electronic transaction capability of the Internet is the ultimate
goal of Internet advertising. The potential for conducting transactions directly with consumers in
an environment with very little physical overhead is one of the factors that led to the boom of
dot.com companies, and also the subsequent bust when entrepreneurs with little sense of
consumer behavior realized that they had to do more than build a pretty Website to achieve
success in the e-marketplace (White, McMillan, & Hwang, 2003).
E-commerce may seem more closely kin to retailing than to advertising, but the nature of
the Internet forces new definitions of both retailing and advertising. One practitioner provided
some interesting observations on the evolution of both standard Internet advertising units and ecommerce: “While rich media adoption has been challenged (e.g. the invasiveness of the ad
units, non-broadband user frustration, higher development and production costs), many clients
are embracing rich media as an effective branding-building and brand-awareness vehicle. There
is little question that rich media will only grow in importance as these ad units begin supporting
additional functionality including but not limited to the ability to provide data collection, lead
generation, surveys, sweepstakes, couponing, gaming, streaming audio/video and commerce – all
within the confines of a standard rich media ad unit.” Indeed, transactions can occur within a
banner ad – no link to a Website is required. So when does a message become a transaction?
The research on e-commerce is more often found outside of the traditional advertising
literature (e.g. in journals that focus more on retailing and brand marketing), but much of the
literature on e-commerce points to the need to consider e-commerce as part of the Internet
advertising mix (Bellizzi, 2000; Ind & Riondino, 2001; Ling & Lawler, 2001). Scholars are also
examining how the unique characteristics of the Internet, such as compression of the hierarchy of
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effects, interactivity, intrusiveness, and personalization, help move the consumer from any of the
other forms of Internet advertising to electronic transactions (Coyle & Thorson, 2001; Kim et al.,
2001; Saeed, Yujong, & Grover, 2002).
E-transactions are not always e-commerce in the traditional sense of visiting a shopping
site, loading up a shopping cart, checking out with a credit card, and then waiting for delivery of
goods and services (either electronically or by snail mail). Other forms of transactions can also
be performed online and are often advertising-related. For example, job boards can allow both
job seekers and employers to transact a review of credentials and an initial interview. Coupons
and sweepstakes can be delivered online for use in a bricks and mortar retail environment.
Summary of Typology
Are the lists of “types” of Internet advertising presented in Table 1 all-inclusive? No.
Variants on the banner ad and other brand-building messages are in a constant state of evolution.
Organizations are creatively designing new ways to communicate to key audiences through
relatively controlled content environments. Clever programmers are constantly developing new
tools that make it easy for consumers to respond to a call to action – whether that be clicking on
a hyperlink for more information or transacting a purchase on an e-commerce Website.
The typology presented in Table 1 provides a framework for thinking about Internet
advertising. Some purist might argue that only messages placed in an outside medium (e.g.
brand-building and direct-response messages) meet the classical definition of advertising. But
because many of those messages lead seamlessly to controlled communication environments
such as organizational Websites and e-commerce sites, it is impossible to ignore corporate
communication and electronic transaction functions when considering Internet advertising.
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The Typology and the Future
As new methods of advertising on the Internet are developed, advertising practitioners
need to realize that Internet advertising is diverse. It includes all of the aspects of traditional
advertising (e.g. media buying, copy testing) as well as many functions that were previously
relegated to specialists (e.g. direct marketing, retail marketing). Researchers need to be clear
about what they are exploring when they study Internet advertising. While the bulk of the
advertising literature focuses primarily on Internet-based brand-building messages, advertising
scholars are also recognizing the importance of exploring all the quadrants of Table 1.
When asked to use their working knowledge of current Internet advertising to predict the
future, practitioners were not unanimous in their vision. Some envisioned revolutionary and
almost constant change: “I see a bright future, but I see one of constant change. We will not
only evolve within our interactive industry (and thus have to deal with the difficulties of change),
but also it seems as we evolve further, we cause a ripple effect in the traditional channels that we
also have to deal with. I think the phrases ‘for every action, there is an equal and opposite
reaction’ is false in our industry...rather, ‘for every action, there is double the reaction, and no
telling if it is opposite or not.’” But others saw the future as one of smaller and more incremental
change: “Honestly, nothing revolutionary. It will blend more and more with television. TV will
become more like the computer and the computer more like TV.” But regardless of their vision
for the future, many practitioners tended to focus their comments on the four key characteristics
of Internet advertising identified earlier in this chapter: compression of the hierarchy of effects,
interactivity, intrusiveness, and personalization.
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Compression
The notion that the traditional hierarchy of effects is compressed on the Internet was seen
as an ongoing trend. Practitioners also often discussed this concept in the context of
“convergence.” Not only is the distance from message to action being shortened, but also all the
channels of communication and transaction are becoming so similar that they are almost
impossible to differentiate. The evolution of both broadband connectivity and mobile
communication devices were often portrayed as central to this trend. One practitioner predicted
a future in which: “near-broadcast quality and personally-relevant content (including both
advertising and programming) will be delivered over nearly universal high-speed wireless
networks to handheld and/or wearable devices designed to enable viewers to customize their
interface, actively engage with the content whenever they want to do so, and customize,
configure, and purchase products from wherever they might be.”
Compression and convergence will make new demands on advertising practitioners. One
wrote: “I believe that advertising media will continue to converge and that ultimately advertising
professionals will be required to develop strategies that are truly integrated and customized to
reach their most lucrative targeted customers.” Convergence will make new demands on
advertising teachers and researchers as well. Integrated marketing communication can no longer
be taught simply as a way of building synergy by using one voice to communicate an
organization’s message. Instead, teachers and students will have to explore what it means to
move from awareness to purchase in a single environment in a very abbreviated space/time.
As several practitioners pointed out, it is today’s students who will probably take the lead
in the future compression and convergence of advertising. One practitioner wrote: “The future
of Internet advertising probably involves an opportunity for integration with traditional
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advertising (cross referencing print ads with Web addresses, etc.) until today’s twentysomethings take over marketing directorships in major corporations. From that point on, I
believe Internet advertising will take the lead against what we now know as traditional
advertising media.”
This trend toward compression and convergence will result in blurring the lines in the
typology presented in Table 1. Corporate communication, which may currently be viewed as a
separate public relations function, must work more closely with both brand-building and directresponse messages. All the compressed and converging functions and features will be ultimately
accountable to the bottom line regardless of whether the transaction happens online or offline
Interactivity
As noted earlier, interactivity is a multi-faceted concept that involves two-way
communication, control or engagement, and timely information. Practitioners see the future of
Internet advertising as being more interactive with increases on all of these dimensions.
One of the keys to successful Internet advertising will be the ability to enable and
encourage consumer interaction with brands. One practitioner predicted: “I believe that as
maturing, ‘raised on digital technology’ consumers gain larger disposable income, they will
demand more interactivity with the brands they patronize.” Another expressed a similar concern
by focusing on the time dimension of interactivity: “Internet advertising will become more and
more ‘real time.’ Response rates and interaction with the consumer will take on a complete oneto-one experience with the user. When you go online, you will determine exactly what your
experience is and advertising will conform to your needs.”
Interactive marketing gives the consumer new levels of control. A practitioner observed:
“In the online world users control the messages they engage. Marketers are not in control.
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Therefore, successful online marketers communicate and demonstrate value to the consumer to
capture their interests and develop ongoing two-way relationships.” But interactivity is a twoway street. Consumers may demand it, but someone has to rise to the challenge of supplying
that demand. Many practitioners noted that building more interactivity into Internet advertising
is critical for the future. But, as one practitioner observed, it won’t be easy: “The power of
interactivity has yet to be realized. At our current stage, most people still think of the Internet as
an information source. This next step will take a major dose of creativity, but once we break out
of our traditional ‘electronic brochure’ mode of thinking, the benefits will be beyond compare.”
Interactivity was also seen as part of the compression and convergence trend. Several
respondents indicated that the demand for interactivity was already expanding beyond the
Internet into other media. That trend is expected to continue and, as one practitioner wrote, “as
television becomes more interactive, professionals from the Internet advertising industry will be
asked to expand their areas of responsibility to include this emerging technology as well.”
The future of Internet advertising will demand an increase in interactivity in all quadrants
of the typology of interactive advertising presented in Table 1. Simple static banners will give
way to brand-building messages that enable more user control, two-way communication with the
advertiser, and timely information. Corporate communication must increase interactivity by
moving away from simple online brochures to communication that allows consumers to engage
and build relationships with brands. Direct response must lead directly to transaction and those
transactions must allow for full-featured consumer interactions.
Intrusiveness
Practitioners predicted that Internet advertising of the future would be both more and less
intrusive. One said simply that it must become “Less intrusive, more informative.” Those who
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focused on the need for reducing intrusion often wrote about the need to reduce unwanted
commercial e-mail. One wrote: “Regulation will increase making it much more difficult – if not
impossible – to send unsolicited messages. This is not necessarily a bad thing - just a reality that
will require senders to be more strategic and knowledgeable in their efforts.” Another
practitioner wrote: “With the proliferation of Ad Blockers and spam laws, permission-based
marketing will be key in the future. Online Advertising’s pervasiveness will be reined in but not
curtailed completely. Hopefully a balance will be achieved whereby people online will be
tolerant of advertising (like they are with TV) and advertisers will be more respectful and less
intrusive toward their online audiences.”
For those who saw Internet advertising becoming more intrusive, they often focused on
how convergence will bring digital technology into every aspect of people’s lives. Marketers
will have opportunities to reach consumers in many more ways. But whether consumers view
those multiple points of contact as intrusive or informative depends largely on how sensitive the
marketers are to individual needs. One practitioner wrote: “In 10 years or less, I believe the
computer as you know it will morph into a server for home networks. Its primary responsibility
will be to manage the inflow/outflow of all video, audio and data. This stream of information
will no longer appear strictly as Web pages, emails, videos and mp3s that must be viewed, read
or listened to on a computer. Instead, wireless options and new compression technology will
make it possible to manage and interact with this information from a variety of locations,
including your phone, handheld organizer, television, car data management center, home TV,
office laptop, etc.”
Several practitioners pointed out the need for better creativity to make these omnipresent
commercial messages more welcomed. One practitioner observed: “We are just at the very
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beginning of the potential for this medium. As broadband access continues to expand and more
businesses transact online, advertising creative will need to be notched up a level or two. That
means better, richer, more engaging, more entertaining creative. It’s getting there but still has a
long way to go.” Another practitioner wrote: “In the future, I hope that Internet advertising
becomes more creative, less irritating, more informative.”
Several practitioners shared the belief that the best way to overcome perceptions of
intrusiveness is by showing consumers respect. One wrote: “We have to be careful not to
intrude on people to the point where as marketers or companies we offend them and hurt our
brands. The brands that have succeeded are the ones that, on the Web and in the real world, treat
their customers with respect.”
The four quadrants in Table 1 carry inherent differences in intrusiveness. Brand-building
and direct-response messages by definition “intrude” in content that users are accessing – usually
for a reason other than seeing the ads that might appear. As messages become richer and are
carried via broad-band technologies, the likelihood is that they may also become more intrusive
– unless the marketers seek to balance the need to get consumers’ attention with the need to treat
consumers with their respect. For corporate communication and electronic transactions,
intrusiveness is less likely to be an issue. Consumers seek out these types of Internet advertising
and thus are less likely to perceive the content as intruding on them.
Personalization
Practitioners predicted that the trend to personalized Internet advertising would continue.
For many, this personalization was a counterpoint to intrusiveness. The more personalized the
content, the less likely it is to be perceived as intrusive. A practitioner predicted: “I think the
future of Internet advertising will bring even more personalized and relevant advertising to
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individuals. The success of keyword advertising on search engines has already led to content
targeting where search engines place ads next to areas they deem relevant to a keyword’s
content. I also think that pop ups and traditional banners will decrease, while sponsored
content/sponsored links will increase.”
Practitioners predicted that consumers would demand more personalization. Consumer
demand has the potential to raise privacy concerns that must be addressed by marketers, but as a
practitioner observed the trade off in terms of consumer loyalty is worth the effort: “There has
been hype out there about the Internet being an intelligent arena that can make highly personal
and effective communications with target customers based on previously captured data. Despite
the privacy concerns this raises, I still believe the hype is achievable. Whether that’s through
your PC, a wireless handheld, a phone, your TV or your OnStar-enabled car, we’re closer to this
achievement than ever. Smart product developers and marketers, who know which unique target
audiences will embrace (rather than be offended by) this type of personalized communications,
will recognize that this can be a cost-efficient, loyalty-driving proposition.”
Tracking and measurement is key to being able to build personalized communication.
Customers must be aware of the fact that the tracking is occurring and be willing to make the
trade off to balance personalization and privacy. But many marketers believe that consumers
will not only accept, but also demand that kind of personalization. “Consumers will place more
value on those brands that leverage technology to learn more about the consumers’ personal
needs and deliver more relevant products and services when and where they need them.”
Advertising agency personnel also believe that this demand for personalization will be
reflected in an increased demand for measurement and tracking by client organizations.
“Consumers will continue to demand more value from brands they chose to engage with. In
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addition, I expect clients to demand more measurement (online and offline) and for
personalization to grow in importance.”
One practitioner summed up the potential for personalization by nothing the importance
of thinking in terms of the customer instead of the advertising campaign: “Internet advertising is
evolving into more of a one-to-one medium. Many of the bold promises that one heard several
years ago about the Web being a customer management medium never got off the ground.
However, a few marketers have patiently tested and improved upon online campaigns that target
users at the segment level (e.g., Prospect, Shopper, Buyer). To the degree that these customerlevel techniques generate better performance than campaign-level approaches, I believe that the
Internet will evolve more and more toward a customer-level messaging medium. Also, as more
and more media become digital (e.g., TV, newspaper, radio, etc.) there will be an increasing
value for marketers to develop consistent messaging logic across digital media.”
Personalization can occur across all of the quadrants in Table 1. Brand-building and
direct-response messages can easily be personalized if marketers buy advertising based on
specific viewers in specific situations rather than simply buying time and/or space on a content
provider’s Website. And if the messages based in external content environments are more
personalized, they may be not only less intrusive but also more effective. When the marketer has
more control over the location, personalization becomes even more important. Corporate
communication tactics can be customized so that consumers consistently see the information that
is most valuable to them. Electronic transactions can present offers that are customized to past
purchases and current search behaviors.
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Conclusion
What is Internet advertising? Clearly, there is not a simple answer to that question. It is
evolving and expanding. By the time this book is published, there will undoubtedly be new
forms of advertising that don’t appear in the typology on Table 1. But both the academic
literature and the experience of practitioners suggest that it should be possible to place those new
forms in one or more of the quadrants in the typology.
There is no one best form of Internet advertising. Sometimes a simple brand-building
message is suited for the marketing objectives of a given organization. At other times, that
message may need to add a direct-response component. And sometimes the organization may
need to take more control over the content environment through forms of corporate
communication and/or electronic transactions.
Regardless of where a specific advertising format might appear in the typology of
Internet advertising, it should to be sensitive to the unique characteristics of the Internet:
compression of the hierarchy of effects, interactivity, intrusiveness, and personalization. Many
practitioners suggested it is quite possible that these same characteristics are now extending
beyond the Internet to other media. As Negroponte (1995) posited in his pioneering treatise on
Being Digital, the job of the communicator is no longer about moving atoms from one place to
another but rather it is about the transmission of digital bits. Internet advertising may very well
be just the first manifestation of the shift to digital advertising that extends across many different
media forms. A future question might well be: what is digital advertising?
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Table 1. Typology of Internet Advertising
Location: External
Purpose:
Brand-building messages
Communication Small format
Buttons
Tiles
Hyperlinks
Audio-only
Banner ads
Rich media (e.g. flash)
Contextual
Expandable
Floating
Frames
Full screen
Pop-ups
Pop-unders
Interstitials
Rich media (e.g. streaming video)
Site takeovers
Listing
Keyword buying
Online directory listings
Search engine optimization
Purchased placement
Paid placement in Websites
Content sponsorship
Online game sponsorship
Paid link to retail site
Externally validated content
Reviews
Rankings
News articles
Purpose: Call to Direct-response messages
All formats above that have a call to
Action
action typically with links to e-commerce
opportunities and often purchases on a
pay-per-click basis
Other forms of embedded content
designed to obtain customers (e.g. coregistration)
Location: Controlled
Corporate communication
Push messages
Opt-in client e-mail
E-newsletters
Newsgroups
E-cards
Pull messages
Brand Websites
Chat
Blogs
Consumer endoresements
Bulletin boards
Fantasy communities
Online games
Webcasts
Electronic transactions
E-commerce
Shopping sites
Micro-sites
Controlled direct marketing
Job boards
Online coupons
Online sweepstakes
Shopping cart promotions
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Appendix 1 – Copy of e-mail survey sent to AAAA member agencies
that provide interactive services
In the AAAA member roster, “interactive” was listed as one of your agency’s special
service areas. I’d like to know more about your interactive services. Let me tell you why.
I am an advertising professor at the University of Tennessee. I am conducting research
for a chapter in a book about Internet advertising. Your answers will help me understand how
agencies like yours are really using the Internet for advertising. I am NOT working for any
commercial enterprise. I have no desire to obtain proprietary information from you.
Following are five simple questions you can answer by return e-mail. If you are not the
best person to answer, feel free to forward to the appropriate person in your agency.
Your time is valuable; this survey should take only a few minutes. I’d appreciate your
response by January 15, 2004.
1. Does your agency provide any kind of Internet advertising services to clients?
2. What is Internet advertising? Be as specific as possible (e.g. banner ads, brand Websites, email promotions, etc.) and include all types of Internet advertising that you know of.
3. How is Internet advertising similar to other forms of advertising?
4. How is Internet advertising different from other forms of advertising?
5. What do you see as the future of Internet advertising?
Thank you for your time!
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25
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