The land of webortunity

Every day on the New York Stock Exchange, someone clangs a brass bell to signal the end of the day's trading. These days that person almost always wears a ridiculously huge smile, as the exchange rings in yet another record high.

Fuelling those records are the Internet stocks, because the Net means business: people do make money, businesses do reach customers, products are bought and sold.

As Professor Nicholas Negroponte, cofounder and director of MIT Media Lab, has commented recently, it's time to drop the "e" from e-commerce and e-business - the Internet is business. And because business goes hand in hand with advertising, so does the Internet.

Companies have the first new media since the 1950s in which to spread their messages, and the advertising dollars are flowing to make it happen.

Few people have a better feel for what is happening in the world of Web advertising than George Gallate, a global director of Euro RSCG Interactive, the second largest interactive advertising agency in the world. He claims a better job title is "corporate funster", but with clients like Intel, Philips, MCI WorldCom and Volvo signed up with Euro RSCG to create and control their Internet advertising, Gallate's "fun" dictates how advertising interacts with the Web we want to see.

I pinned Gallate down between trips to San Francisco and Brazil to talk about the Net and advertising, especially in the US.

PCW: What has the Net done to the advertising business?

Gallate: In a way never before, a marketer who is not using the Internet in their marketing mix is missing out. Some of the largest [US] advertisers are putting about 10 per cent of their budget on the Net; sometimes that can be 10 per cent of $300 million.

PCW: But isn't the Internet just for nerds?

GG: No way. The Internet is mainstream in the US. The demographic of the Net user is becoming closer and closer to the profile of the US citizen. It is far from nerd territory.

PCW: Just what are Web advertisers trying to achieve with their ads?

GG: With TV, we try and change a person's impression of a product, but that is only part of the story on the Web. For a client like Volvo, for example, we might want to create an impression of the company or the car, or we might want to create test drive opportunities for Volvo dealers. So there are different aims.

The old way [of Web advertising] is finding a Web site that matches the demographic of the target audience, and advertising on it. The new way is creating what's called a branded user experience.

For example, Americans are really into sports statistics - how many touch-downs or home-runs or whatever. So an advertiser might sponsor a Web stats site and add their brand to the experience. Another technique is called a "roadblock", where we book ads on all major sites in the US, so everyone sees a particular ad on one day. It's expensive but it can be very cost-effective.

PCW: I put it to you, that no one clicks on Web ads. I can only remember clicking on one ad in the last two years.

GG: You loser! [laughing] Seriously, lots of people click on ads, and with the improvement in measurements, we can see what they click on, how far they go into a site, and whether they come back.

PCW: How does Australia compare with the US in Web purchasing? It seems Americans are very comfortable with the concept of mail-order shopping.

GG: Australians are very open to mail-order, but nowhere near the Americans when it comes to purchasing via mail-order. The one issue the Americans have is giving their credit card details over the Internet. The irony is that it is safer to use encryption on a Web site than it is to give your credit card to a waiter at a restaurant.

PCW: So what's next? What is the future of Web advertising?

GG: Wider bandwidth and increased processor power and better apps will lead to a really rich media experience, and with this advertising will become content.

PCW: And how is TV responding to Web advertising? What does the future hold there?

GG: Well, there's simultaneous Web and TV broadcasting, WebTV, and cable TV that allows enhanced operation with the Web. But TV will never go away. TV is a passive entertainment form that is highly relaxing - unlike the PC. The Internet is active; you have to do something.

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