AT&T Tech Support 360
March 30, 2004 1:18 PM PST
New wave of Web ads on the way
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Highlighting the trend,
What's new:
Internet marketers are promising a new generation of online advertising "lite" that's more effective and less annoying than some current brands.
Bottom line:
Surging online ad sales have made investors receptive to new online marketing approaches for now, but long-term success depends on winning over skeptical Web surfers.
Another upstart, United Kingdom-based
The announcements come amid a
"Where there's money, there's innovation, and these new firms will be presenting interesting new ways for advertisers to spend their hard cash," said
Marketers have long heralded the Internet as a sea change for the advertising industry, promising new techniques for delivering only those sales pitches that readers actually want to see. The reality has fallen far short, however, as advertisers shied away from the medium, and initial efforts from pioneers such as DoubleClick
The industry has responded with new methods, scoring a runaway success with search engine marketing that uses query terms to serve up targeted ads to Web surfers. But other formats, such as pop-up ads and adware, have faced a considerable backlash.
Vibrant and 180solutions signal the emergence of a new wave of online advertising at a time when Web surfers are finally accustomed to--and armed with the tools to block--the old ones.
Internet operators are eager to get a slice of the estimated $4 billion
"Venture capital is back, and they are very much interested in ad technology, because it's a field that's heating up," said Denise Garcia, an advertising analyst at research firm
What's old is new
Founded in June 1999, Bellevue, Wash.-based 180solutions develops advertising software. Its product,
For example, type "hotels" into the search box at Yahoo or Google, and Zango's search assistant will automatically serve up the home page of Expedia in another browser window, a recent test of the software showed. The term "casinos" called up the home page of 888.com, which prompts the visitor to download gambling software. Visiting the jewelry site Ice.com delivers a window for another shopping site.
The formula is well worn by companies like Claria,
Yet 180solutions is different in several ways. First, it delivers ads that are simply the home page of the advertiser, instead of an advertisement with a link to the company home page. Taking a page from search advertising, it auctions keywords to marketers, typically charging between a penny and $1 for the "visit."
Second, 180solutions plans to make partners of Web publishers, which often hate ads obstructing their content. Publishing partners get fees for each person who downloads Zango.
The benefit to users, 180solutions CEO Keith Smith says, is access to ad-free content. "We introduced a concept called time shifting with the idea of letting readers get access to content unencumbered by banners and pop-ups," Smith said. "Instead, they would install our software, and then, when they are shopping or looking for something online, they would get ads that are relevant and timely."
He added that users will only see two to three ads a day.
Zango has so far signed on
"I love the Internet, but I hate what it's becoming--you know, an intrusive...slithery place of smut and pop-ups," said Sir Mix-A-Lot. "In designing my Web site, I have no advertisers, no banners, no pop-ups. The problem became keeping my content fresh without costing a lot of dough."
"Zango's all about keeping the Internet free," he added.
Complaints and challenges
But 180solutions is entering a thorny market. Some adware programs have been criticized for lax disclosure policies, leading to complaints from users that they installed the program without knowing it.
The company has faced such complaints over n-Case, billed by the company as an advertising software tool.
n-Case has been installed on 30 million PCs, 180solutions' Smith said, and the company plans to "upgrade" those applications in the coming year. He denied that n-Case is
"We don't collect personally identifiable information....and the user has to give consent," he said.
Smith added that with n-Case, it was more difficult to inform users about the software, because it was bundled with third-party applications. "It's easier to inform people when they're downloading it from content partners," he said.
180solutions could also face legal uncertainties over Zango, given its ability to deliver ads while customers are visiting third-party Web sites.
Similar applications from Claria and WhenU have established unfavorable legal precedents in the arena.
Last week, a European court issued a
Yet at least one judge has ruled in favor of WhenU. In November, a federal court judge in Michigan
Even if 180solutions gets past the legal issues, it still must woo reluctant advertisers. Jupiter Research analyst Gary Stein said as many as one-third of advertisers have philosophical grievances against adware, and about 8 percent of companies actually have corporate mandates not to advertise with adware companies.
Is it a hyperlink? Or is it an ad?
An emerging company is also set to make Web editorial content more ad-friendly by taking its boundaries away.
Vibrant Media develops a service called
In one example, a story on
Other companies have tried similar offerings without publishers' sign-off--and without success. In 2001, Microsoft developed technology called
Similarly, a company called eZula has drawn complaints from publishers, because its text ads appear on top of their content without their permission.
Vibrant is attempting to avert those foils by giving publishers reign over it.
The company has been in stealth mode for more than a year and is now making some noise, having signed up other publishing customers, including Hearst and
The technology is complementary to Overture's, because it relies on syncing keyword ads to the context of a Web page, or what's called contextual advertising. It scours pages to discern their meaning and deliver related ads. What's different is that the contextual ad networks of Overture and Google relegate text ads to the margins of Web pages, whereas Vibrant's customers buy in to feature ads in the content.
"We're fulfilling the promise of contextual advertising--it has been in the back of the class, where banner blindness exists," said Doug Stevenson, who founded the company in 2000. "This delivers higher response rates for advertisers by their being linked to content in a relevant way."
Vibrant has $2 million from angel investors and
Still, analysts say response rates for contextual ads pale in comparison to sponsored search. What's more, people may be confused by the nature of hyperlinked ads.
"Isn't that a little misleading? The Internet is all about links to other information--people could feel like they're being deceived a bit," said GartnerG2's Garcia.
CNET News.com's Evan Hansen contributed to this report.
See more CNET content tagged:
180Solutions,
online advertising,
adware,
wave,
venture capital
may be you should think of editing it or bringing in elements like boxes with the finer points of the story.
Really think that you'll should just present the story (which is mostly in the first section) and then provide a link called 'deeper infomation' or something.
Thanks,
William M Gary