Online Ad Industry Gearing Up for Broadband Revolution

Broadband ads are coming fast and the online marketing industry hopes to be ready.

This fall, the Internet Advertising Bureau (IAB) will release a final set of guidelines and specifications for online ad formats that take advantage of broadband speeds to deliver multi-media marketing messages.

Greg Stuart, chief executive officer of the IAB, said the move is something of a departure for his group. Typically, the IAB gets involved with setting voluntary standards and guidelines for online advertising when the forms become financially significant — typically business worth a billion dollars per year or more.

‘A Big Deal’

“Broadband is nowhere near that yet,” Stuart told The E-Commerce Times. “But we’ve decided to take our collective time to set some guidelines because of our belief in the importance of this area going forward. We all believe this is going to be a big deal.”

The effort to establish guidelines — a draft version was released in May for comment from online publishers, advertising agencies and others and a final version is due out sometime this month — also underscores the uncertainty of the new advertising medium.

“It’s sometimes difficult for a marketer to get into a brand new space like this,” Stuart said. “They don’t know where to start. They don’t want to feel like they’ve been taken advantage of.”

Of course, any guidelines would be voluntary, with neither publishers, marketers nor creative agencies bound to them. The concern is that with a brand new medium, and by all accounts a powerful one, on the horizon, broadband advertising doesn’t become the Wild West of online marketing.

What’s Next?

A number of factors are driving the rapid growth of broadband ads. While consumer adoption of broadband has made the ads possible, the rapidly changing demographics and the splintered nature of the TV advertising marketplace are driving marketers to seek new ways to reach consumers, particularly younger ones.

Most analysts do not break out broadband-dependent ads in their predictions of Web advertising growth, but all agree they will contribute to the rapid growth of the overall segment. Morgan Stanley analyst Mary Meeker recently said that with broadband penetration expected to reach 50 percent of U.S. homes by 2011, the industry may see a long period of sustained growth.

Stuart said the goal of the guidelines is to “try to make the marketplace work more efficiently” and give ad buyers confidence that they will have success in the format.

Already, some have found ways to re-purpose television advertising for the Web. One such venue is car buying site Autobytel, which streams thousands of hours of car advertisements each month, many of them called up by users by choice.

Many experts believe that element of self-selection, which goes beyond personalization to the point where users are seeking out ad campaigns based on word of mouth or media buzz, is where the true promise of broadband ads lie.

“The truly successful ones won’t be much like traditional TV commercials,” Bruce Kasanoff, president of marketing firm Now Possible, told The E-Commerce Times.

Kasanoff sees more creative advertisements that include an immediate call-to-action from users. Because they can be targeted to certain sites, some experts also think the ads will push the envelope in terms of content.

Fast Forward

One important consideration is the element of choice. How much control should the viewer have over an advertisement? Should they be optional, with a button to allow skipping past them? Should users be able to freeze, rewind and replay them at will.

The IAB draft guidelines released in May suggested allowing users to have access to start and stop buttons as well as volume controls. They also suggest limiting ads that run before video the user is seeking to play to 15 to 30 seconds, though spots that run after such video clips can be of any length.

Hairong Li, the editor of the Journal of Interactive Advertising, told The E-Commerce Times that consumers crave such control. It’s equally important, he said, that ads provide something useful.

“Our research indicates that entertainment and information are two key elements of a good rich media ad,” Li said. “With them, an ad is perceived less intrusive.

Because they use up so much bandwidth and computer power, and because they often automatically include sound, such ads “should be activated by the consumer, instead of popping up automatically,” Li added.

“Giving the consumer the control over how to view it, plus being entertaining and informative, broadband ads could have larger impact than television commercials.”