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HolidayBuyer's Guide
Internet

Ads allow one-stop shopping

A new advertising model lets consumers browse, shop, and buy products--all without leaving the banner or the content site they're in.

Just as the advertising banner has become a Web standard, a new model is emerging that lets consumers browse, shop, and buy products--all without leaving the banner or the content site they're in.

First Virtual Holdings (FVHI), which went public today, launched a prototype last week of the new model, VirtualTAG. The ad is gaining the approval as an increasing number of companies and individuals who believe that the concept represents the future of advertising on the Web.

VirtualTAG uses applications like Java and Shockwave to create transactional advertisements inside a standard-sized banner.

The VirtualTAG test ad is up on Stock Smart and lets users shop for a watch from 1 Virtual Place, an online shopping club for VirtualPIN holders--two brands owned by First Virtual. Users can click through to product details, order products, and arrange for shipment all within the same multimedia ad banner. And they can do this without giving a credit card number or an address because their VirtualPIN is an alias for that information.

Pierre Wolff, director of strategy for First Virtual, said the week-old ad has beaten the traditional banner click rate, which represents the ratio of users who take the step of linking to advertisers' sites from a content site.

"Response has been better than the average of a two to three percent click rate," he said. "We're doing better with this."

Bringing television's successful infomercial concept to the Web, the revenue model for VirtualTAG is also new, Wolff said.

Instead of paying based on the number of impressions a page gets where an ad is placed, advertisers share a percentage of their sales revenue with the content provider.

"The other opportunity from content providers' perspective is users don't leave your site," Wolff said. "When users click and interact with the ad banner, the click rate for the entire site goes up. This allows impression-based advertisers to also benefit."

For now, First Virtual is keeping a lid on its marketing strategy and potential customer list because it went public today. But those in online advertising say the concept is right on the money.

One person giving a green light to the model is Rich LeFurgy, vice president of advertising and marketing for Starwave and acting chairman of the Internet Advertising Bureau, an organization formed this year whose member represent publishers, search engines, Net directories, and advertising agencies.

"The way that it's designed, to allow an audience to stay within in a destination site's overall page while only letting the ad banner change, is absolutely going in the right direction," he said.

He said advertisers are finding out that consumers want product information, not mega-content sites. VirtualTAG falls in line with this, letting advertisers display brands and products while leaving the content up to the publishers.

"Were actually doing something similar thing that we haven't rolled out," he said. "It allows the page to stay the same and lets the user the change the banners content. Ours is a brand-building version, First Virtual's is a product-selling version."