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Browser wars affect advertising

The new versions of Netscape?s and Microsoft?s browsers, along with push technology and offline browsing, could significantly change online advertising.

    New features in Microsoft's (MSFT) Internet IE 4.0 shakes industry Explorer 4.0, as well as similar technologies in Netscape's next browser, may hasten changes in how Internet advertising is bought and sold.

    Specifically, "push" capabilities, offline browsing, and full-screen animated ads are likely to redefine not only how Internet advertising is presented, but also how it is paid for, observers suggest.

    "The success of PointCast and Berkeley Systems [using full-screen, animated ads] shows that advertisers are potentially interested in larger, TV-like advertisements," said Evan Neufeld, an online advertising analyst at Jupiter Communications. But change won't come overnight, he cautioned.

    "We talk a lot about getting beyond the banner, but when all is said and done, advertisers are reluctant to pull the trigger," he said. "Long term, it's a huge play, but today advertisers are still serving static banners."

    More troubling for John Nardone, director of media and research for online ad agency Modem Media, is that the 4.0 versions of Microsoft?s and Netscape?s browsers are different enough technically that they may require that separate ads be created for each.

    "Our technical folks are starting to see if we have to do separate versions for Internet Explorer and Netscape browsers," said Nardone, whose agency represents AT&T online. "We have not been in the habit of doing separate versions for Netscape and IE. This issue is significant enough that it's a cost issue for our clients."

    Rick Boyce, executive vice president of advertising and electronic commerce for Wired Digital, said his division is devoting most of its attention to how ads will look in the new Web environment.

    "We're spending most of our time in the push environment, figuring out how ads are going to look in full screen," he said. "We're spending our attention not so much on the reporting issues but the creative issues."

    Boyce pointed to PointCast as a potential model for how to pay for ads in a push, channel environment.

    "We've all got to look at PointCast and probably adopt what they've been doing," Boyce said.

    PointCast has done several things in the push ad arena. First, it standardized a 30-second, full-screen "intermercial" for all its own channels and those its partners create. Second, it takes a conservative approach in counting how often its ads are seen, basically capping at two views per month what it charges advertisers for having their ads shown on a PointCast channel.

    "Since we've done all this work and have had a lot of success, [there] certainly may be an opportunity to standardize on what we've done," said Jaleh Bisharat, PointCast's senior vice president of marketing, who earlier this month called for the Internet advertising industry to develop new standards for push ads.

    That effort is likely to begin soon. When the Internet Advertising Bureau issued standard guidelines for Internet ads this month, it said they will need to be updated within six months to deal with offline browsing, push ads in Web channels, and robots or spiders that "crawl" Web sites looking for new material.

    The issue of spiders may come to a head first. In offline browsing, a Web browser uses so-called spiders to go to Web sites and download new material, checking as often as once an hour. That generates traffic on Web sites, but it doesn't generate new views of ad banners, because the process is automated.

    "We have already noticed that [Netscape's] Netcaster is affecting our count," said one Web publisher who asked not to be identified. "To our log file, we can't tell the difference between a Netscape 4.0 browser and a spider."

    The spider for Microsoft's browser, by contrast, lets sites differentiate spider activity from a person who is using the browser online.

    The spider issue is related to a longtime issue in online advertising: how to deal with "proxy caching." Web publishers already grouse about the practice of many corporations, America Online, and other Internet service providers of caching popular Web pages.

    By caching a page, AOL can serve it to its members faster, but the Web site whose page is cached never knows how many people are seeing the page and its ad. That means a potential loss of revenue for the Web site.

    Glenn Davis, who runs the Project Cool site, thinks push technologies will boost brand advertising, efforts to raise familiarity with a company or product name.

    "Branding is largely ignored in Web advertising at present in favor of banner impressions and click-throughs," Davis said. "Perhaps push will spur more thought toward the branding component and less on the pure numbers. One can only hope."

    Reporter Alex Lash contributed to this story.

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