20th anniversary of the banner advert: Digital advertising begins its third decade

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Internet advertising revenues have twice regressed, firstly thanks to the initial internet bubble bursting (a rerun of Tulipmania), the second courtesy of the Global Financial Crisis of 2007-2008. The spikes that have developed in recent times are the annual Christmas spend.

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On October 27, 1994 the first banner advert appeared on HotWired, the forerunner of Wired. The tenth birthday did not get much news coverage back in 2004, though Gizmag covered it, albeit a few days late.

A look back at our story of a decade ago illustrates just how much further the internet has evolved commercially in digital advertising's second decade, and portends a future where digital advertising is ubiquitous.

Whereas the fledgling internet industry of 1994 had trouble explaining what the internet was to advertising decision makers, by 2004 the internet accounted for 3.5 percent of global advertising expenditure, though it was still dwarfed by the (then) traditional advertising mediums of television, newspapers, magazines, radio and outdoor, as the above emarketer chart from that article showed.

These days the sophistication of the advertising spend has increased dramatically, and the accountability of digital advertising has seen it surpass all but television, with that too forecast to be eclipsed sometime in the next few years.

Interestingly, while internet usage is now heading inexorably towards ubiquity, it is not via the desktop computer, which we anticipated would become the world's primary advertising delivery vehicle, but by the smartphone and to a lesser extent, its unlikely cousin, the tablet.

The warp-speed worldwide adoption of the smartphone/phablet has taken all but the savviest of marketers by surprise and budget smartphones are now penetrating the back blocks of China, India et. al., enabling the disadvantaged to self help in alleviating poverty and becoming educated – something that the governments of the world have not been able (or perhaps wished) to achieve with direct intervention.

The above image from the Ericsson Mobility Report paints a clear picture of the global adoption which now seems certain to be largely achieved in digital media's third decade.

Almost each and every one of us (well, at least those with enough money to be worth attempting a cashectomy) now or will soon carry a wireless, networked computer on our person. That powerful networked computer is so useful in making informed decisions about near everything that it will become the most influential and relevant delivery medium for those seeking to influence those decisions for monetary gain.

The growth of digital advertising revenues has seen the sophistication of advertising delivery develop exponentially over the last decade, and the high science of digital adops is now a vastly different animal than it was just two years ago, let alone ten.

Perhaps the most astonishing aspect of the whole whirlwind of digital advertising is that it didn't exist just 20 years ago. A decade from now when we celebrate the banner's thirtieth birthday, digital advertising will have long since conquered and transformed the broadcast mediums we now know as television (video) and radio (audio).

Whereas the senseless inefficiency of chopping down billions of trees, pulping, printing and schlepping them (newspapers) has been doomed for decades, the long term viability of heedless broadcast media must now be in question.

Why would anyone wish to listen to or watch "average" programming when deeply personalized content delivery is available?

While writing this article, I have watched the final warm-up sessions of my favorite motorsport via streaming (something that would never feature in a free-to-air TV programming schedule), watched the video highlights of several other sporting events close to my heart, checked the news that interests me and watched my mate's judo match from yesterday. Thanks to the device formerly known as the mobile phone, Shane was able to capture and post a low-quality video on Facebook and the small sub-set of humanity that cares how he went in a small tournament ten thousand miles from here could see it too.

The MotoGP streaming was even more indicative to me of the future of sports coverage, and it isn't broadcast. The MotoGP streaming offers a choice of numerous camera angles, live timing and the ability to reconfigure the tiles to keep perfectly informed as to what's going on. I am no longer at the mercy of a television director who simply doesn't know enough about the sport making decisions as to what I'm going to see. I've lost count of the times on broadcast coverage when a crucial battle is going on in one part of the field, but the director's ignorance has seen the screen filled with an inconsequential focus. I like the choice, and I suspect sports fans globally will pay the freight to disintermediate the numpties.

While I have never had enough discretionary time to sit through someone else's idea of what makes interesting viewing, I now have choice, and within a decade, so too will most of the rest of the world's eight billion people.

The logical evolution of big data and programmatic advertising and their gestating offspring means the advertising dollar of the future will target each consumer and their own peculiar psychology, based not on fuzzy old-world predictors such as how old they are and where they live, but on what they have been observed to do online. It's conceivable that before long the advertising community will understand you better than you do.

The demographics and value segmentation of broadcast TV show audiences helps to get carpet bomb advertising in roughly the right area, but digital can and will deliver a million sniper bullet personal messages couched in exactly the right terms to pique your interest in a product or service.

This scenario is already taking shape (and I can't see anything that can stop it from going where it's headed), but a decade from now the bulk of advertising messages delivered to individuals will be a lot less like the poster Martin Luther nailed to the door of the Castle Church in Wittenberg on October 31, 497 years ago, and a lot more like a persuasive, mind-reading salesman you encounter at the exact point of sale.

It's a scenario we could not have been anticipated happening so soon when the humble banner advert above made its first appearance on Nicholas Negroponte's Wired magazine just twenty years ago today.

It's also a scenario worthy of careful consideration. While I'm all for the free market being given the opportunity to persuade me to change my brand of underwear, I'm not at all convinced that the direct targeting of swing voters by the party with the most money will lead to a better world. If the knowledge already available to the governments of the world about each individual through their on-line activities is deployed in anything less than an honorable way (and politics makes a bar room brawl look like it is conducted by Marquis of Queensberry rules), it is shaping as a turnkey system for a despot.

As is our custom at this humble tome, we like to share great resources on each subject we cover, and there are some very thorough and well-written stories on the history of online advertising at adpushup and avangate.

For those interested in the growth of internet usage and digital advertising, may we suggest internetlivestats, internetworldstats and the Internet Advertising Bureau's ad revenue report.

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