Billboards on the Infobahn

They can sing, they can dance, and they're always in your face. Welcome to the latest trend in online advertising.

They go well beyond the usual "banner" ads--those ribbons of information that sit atop your screen, begging you to click on them while you go about your business.

See how Web advertising is evolving

Instead, these new inventions come to your screen quite uninvited and unannounced and they take over. For the most part, they either sit there in the middle of your screen long enough for you to read their message, or they perform a little jig to a digitized tune. In the advertising trade, they're called "interstitials."

At Women's Wire, for example, an interstitial "cover page" that bears advertising pops up before the official home page loads onto the screen. The interstitial page stays up long enough for it to be read, then automatically turns to the site's index page. No additional click is needed.

Word also makes liberal use of this kind of "forced advertising," as many in the industry call it. The interstitial pops up as the user is navigating from one page to the next within the site.

"They're more interruptive, more intrusive," said Rich LeFurgy, vice president of sales and marketing for Starwave, an information provider for online services.

And that's the point, explained Steven Drace, vice president of advertising sales for Berkeley Systems. "Ad agencies are the only place where 'intrusive' is not a bad word," he said, adding quickly: "I say intrusive, but not 'offensive.'"

As the Internet continues booming into the consciousness and computers of the world, Web developers who were once content to put up their pages gratis, now are turning to advertisers to pay the bills. In turn, advertisers are looking for new ways to get their message across as static banners become increasingly forgettable.

Traditional banner ads aren't going away, industry experts say; they just aren't bringing in enough money. So advertisers are trying to get Netizens to sit up in their ergonomically correct chairs and take notice of their work without crossing that fateful line from intrusive to offensive.

"Advertisers are looking for a way to get more emotional, multimedia-rich ads as opposed to just banners," said David Carlick, executive vice president at Poppe Tyson. But he added, interstitials probably won't be replacing banner ads. "I think banner ads are here to stay. Banner ads have their own terrific role."

It's a delicate balancing act. "Something's going to have to change in Web advertising. I can tell you that," said Jason Pontin, managing editor of The Red Herring, a magazine for venture capitalists. "We're finally getting figures from advertising revenues. They're very, very low."

Although the industry is growing, ad revenues on the Internet are low compared with those of traditional media, such as television, radio, and newspapers.

While Forrester Research put ad revenues at less than $30 million last year, the company is projecting ad revenues to reach $80 million this year, according to analyst Mary Modahl. I/Pro, which provides Web measurement and analysis services, put the figure for this year at $110 million.

That may sound like a lot, but it's still a small portion of the money being spent on advertising overall. "I would suggest that $110 million really isn't very much compared to the billions spent by broadcast and print advertisers every year," Pontin said.

"Consider the thousands of Web companies, whose operating expenses are theoretically based on Web ad revenues who have to feed from that very trough," he added. "It's not enough. The very smallness of the amount suggests just how nervous advertisers are about advertising on the Web."

Advertising experts also point out that an ad's mere presence doesn't mean that people will click on it. In fact, click-through rates are estimated at an average of 1-1/2 percent to 4 percent, LeFurgy said.

That's why, Carlick says, "People will use any tool, trick, resource, or gimmick they can to get the attention and commerce of their target customers." That's where interstitials come in.

Berkeley Systems, known best for its After Dark screensaver, is one of the early adopters of this kind of ad in its new online version of the You Don't Know Jack game show, which is available starting today on the Web. To play the games, users download a 2.5MB player to their hard disks. Then, the game streams over the Internet onto their screens, along with ten-second, full-color, full-sound, animated commercials.

The current version of the game begins with a ten-second spot for 7-Up that looks and feels a lot like, well, television. That's precisely the goal.

Berkeley Systems isn't the only company to give these types of ads a shot online. PointCast also has been running little animated advertisements in its screeensaver and newsreader the last few months.

"Broadcast television works because at some level there's value in the advertising. Advertisers are looking for better and more intrusive ways of getting their message across," Starwave's LeFurgy said. "That's why PointCast has captured the imagination of advertising people. It's more similar to television. It's interruptive."

He added, however, that bringing ads to the Web is "a double-edged sword" because Netizens, unlike the couch potatoes of the TV generation, are used to surfing unemcumbered, free of pesky commercials. "The Web is this freak of nature where you're getting all this great content, but you're not paying for it anywhere," LeFurgy said. Noting that there needs to be a balance in the types of advertisements used, he added, "if you load up your site with interstitials, surfers will say, 'Enough.' People don't want to spend time loading ads."

That's why it is important to choose the audience most likely to accept interstitials in the first place. And then the Web developer must still be careful not to overwhelm the user.

The producers of the Jack show were worried about just that. "We were afraid people were going to be turned off by the advertising," said Leslie Mullens, the show's producer.

Mullens added she has been pleasantly shocked by beta testers, who for the most part loved the ads. "The surveys were saying, 'Your ads are amazing. They're so cool.' We're making them just as entertaining as the game. It takes it to a whole new level on the Web."

Carlick at Poppe Tyson agreed that Berkeley Systems is on to something big.

"Ads that move more, have more animation, more sound, are more complex, and use all the tricks of the trade that people have grown accustomed to in television and radio will be in the pallet of the Web advertiser over time," he said. "These are pretty nice first steps towards solving the technology problems that let us deliver."

But even if these ads didn't require the user to download a player separately, or even if they could be used in the normal course of surfing, they still wouldn't work for everyone because not everyone would sit through them.

"If your Web experience is broken up by this interstitial, you'd probably stop using the Web. If every time you flipped from one Web page to another you got caught with a little vignette, that would kill the experience for you. It's kind of a tricky thing," said Jeff Ratner of Young & Rubicam.

Several Web sites, including The Red Herring, Word, and Women's Wire are experimenting with a middle ground: simple interstitials that amount to a short interruption for the surfer. One of these forms is a "splash" screen, which pops up when you call up a Web page, and either goes away with a click of the mouse or disappears automatically after a few seconds.

America Online uses such ads on its proprietary network for subscription-paying members.

Interstitials aren't the only recent innovation in the advertising medium. Companies are experimenting with all kinds of new ways to draw in the customer. "People are sort of fed up with banners," said Modahl of Forrester. "They're not going to go away," she said. "But people are thinking of more innovative ways to advertise."

Some, for instance, are experimenting with elaborate ads sent by email. Netscape Communications, in one case, offers Netizens a variety of HTML- rich subscriptions and products at In-Box Direct.

Rich LeFurgy of Starwave

Advertisers also have been experimenting with sponsoring sites, and they are beginning to test another, more subtle way to push their wares called product placements. These allow content sites to link to sites where certain products are sold. This type of advertising, barely in its infancy, can range from linking a seemingly unrelated content site directly to a product site where goods are sold or vice versa. For example, Microsoft Network's online travel agency Expedia links directly with the online service's Mungo Park, a site featuring multimedia-rich reporting about world exhibitions.

Banner ads are being enhanced so that they flash or "morph" to grab the surfer's attention. Companies are experimenting with layering banner ads so that readers can click on them for more information without going to the advertiser's home page.

Lest anyone dismiss the simple banner ad altogether, Carlick is quick to note that the industry is still in its developmental stages. "We have an advertising industry that is barely two years old," he said.

Young & Rubicam's Ratner points out that even the commercials on the You Don't Know Jack show are accompanied by banner ads, the only way that a user can click and give the advertiser the satisfying counts on which so many companies have come to depend.

Whatever shape ads take online, Netizens, many of whom still rue the day that the Internet went commercial, better get used to them because the electronic advertising industry is booming.

One recent study by Frost & Sullivan estimates that 1996 Web advertising had 3.4 percent of the Internet's market share. Frost projects that figure will grow to 22 percent--$5.48 billion--by the year 2002.

The question is exactly what that money will be paying for. "Not only do we have to prove that ads make things better because they enrich content, but also do we have to prove the effectiveness of advertising on the Internet," LeFurgy said. "All that is assumed on television and radio. The Internet is held to a higher standard because it's new."

Banner Ads
These are the ads that have populated the Internet for two years, usually sitting at the top of Web pages.

Users can click on the ads, but many have come to ignore them, which is a problem for advertisers. Banner ads are getting increasingly animated using Java applets to catch attention.

Some companies are experimenting with designs that have more depth. Instead of taking the user to a referring page, for example, the banner provides more information itself.

Interstitial Ads
These ads appear on the screen while the user is surfing, often when they enter a site. They usually take two forms:

Static interstitials
This is the one most commonly used. In this case, a static picture fills your screen with text about the advertised product or service. (An example can be viewed at Women's Wire.) The picture sometimes disappears after a certain amount of time or allows you to click it away. Some interstitials, such as those used on America Online, require the user to click a dialog box before entering a site or service.

Animated interstitials A new form of animated interstitial ads are starting to be used on the Web more frequently. Heavy on multimedia, they require the user to download players and content before viewing. (An example can be found at the You Don't Know Jack game show once it becomes public Monday.) They can include sound and simple animation. In one of the latest examples, the interstitial looks a lot like a television commercial, which is often the goal.

Other Ads
Other forms of online advertising include sending HTML-rich email and placing products within Web sites. In the case of email, advertisers are starting to contact potential customers directly with messages filled with linkable code. In product placement, sites marry content with products by referring surfers to related e-commerce sites.

Lastly, there is always the ever-annoying and much-criticized spam, an offshoot of one of the oldest advertising schemes in the world: junk mail.

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