Advertising on the Internet stinks. To be fair, I should say that most advertising on the Internet stinks. Yet it is equally true to say that some Internet-facilitated advertising is altogether brilliant and leads to millions of dollars in revenue from Internet consumers for some companies.

What distinguishes effective Internet-facilitated advertising from wasted dollars and cyberspace public relations nightmares? A solid understanding of the nature of the Net as a new form of human communication, consumer behavior, and virtual culture is the key to success in this revolutionary medium. Whether in the world of business or science, positive results always rest upon sound theoretical understanding.

The following will guide you through the theoretical foundations of the Internet as an advertising medium and provide you with a practical working knowledge of the new opportunities and techniques for marketing to tens of millions of wired consumers.

The Theory

The history of advertising has been a story of "info-reduction." Firstly, the economics of the print medium forced advertisers to keep the amount of information that could be passed on to consumers to a minimum. Radio further reduced content to memorable jingles, and television again reduced the content to mere seconds as a result of production trends and viewer habits which arose from VCRs and remote controls.

The past five hundred years has seen advertising move from the domain of text, to sounds, and then to images. Along with being innately reductionist, until the arrival of the Internet all advertising mediums were also uni-directional. Print, radio, and television together created an enormous gap between the broadcaster/producer and the audience/consumer. This situation has led to one of the single biggest challenges facing businesses in the 90's: consumer feedback. Why do people buy a particular product, who are we serving, and what do our customers really want from us?

The globalized marketplace of the 90's has served to create an ever increasing gap between the consumer and producer of goods and services. In the midst of an image-oriented passive culture of disaffected "target audiences," cyberspace is best understood by Madison Avenue as an alternative media revolt which is well on the way to capturing a dominant position within popular culture. The Net is pushing itself into the realm of everyday experience. As a result of almost three years of unrelenting press coverage and exponential growth, the Internet is now part of mundane reality. One indication of this is the decreasing frequency of explanatory sentences in mass media coverage of the Net.

The Internet is currently growing more quickly than any other communications medium in history. By the start of the approaching third millennium cyberspace will connect half-a-billion wired consumers around the globe. It is not hard to see why the Net is both so popular and so contagious when you listen to its members relate their online experiences in almost religious terms. More than anything else, isolated and disempowered consumers are flocking to the Internet because it provides the essential elements missing from broadcast culture: information and feedback, content and community.

At the close of the second millennium this present generation is witness to the decay in the influence of broadcast media and a challenge to its monopolies of thought (expressed in terms of "brand name" and "market share") that are acquired through the purchase of "audiences" (read "minds"). In cyberspace, the consumer is liberated from controlled content by uncensored mass communication and near-instantaneous access to primary sources of news. Intel's run-in with disaffected Internet consumers late in 1994 demonstrated how the Internet serves to provide wired consumers with a reality check on the spin doctors of the corporate world. This dynamic of the Internet as a communication medium leads to the first principle of Internet marketing: info-expansion.

Info-Expansion

The Net, as an advertising medium, effectively reverses the trend in the evolution of marketing and allows you to provide more, not less, information. Not only does the Net allow marketers to provide an almost unlimited amount of information, the new breed of wired consumers also demand access to information in the context of a highly competitive globalized marketplace. Fortunately the cost of providing content on the Internet, when compared to the cost of communicating information through radio, magazines, newspapers, or television, is best described as trivial.

Once you have established an online marketing presence with an electronic newsletter, mail-server, or hypermedia store front, the cost difference between providing ten pages of information and one hundred pages of information is insignificant.

It is here that we find the most unique character of cyberspace as an advertising medium, and it is here that most Internet-facilitated advertising seen thus far proves to be woefully inadequate. At the start of 1995, most of the more than ten thousand companies marketing on the Internet merely transferred traditional marketing material to the Internet when they should have transformed their message according to the dynamics of this new medium.

Transforming verses Transferring

The Second Rule -- Create Community

The new paradigm of Internet marketing is actually a return to the oldest form of commerce, buying and selling in the context of life-long, interpersonal relationships. Before the rise of modern advertising and marketing, people bought goods and services within the context of a relationship that spanned generations. Individuals bought from the same merchant families that their mother, and grandmother, and great grandmother patronized.

The Internet is the first mass media that allows marketers to fully engage the power of relationships and consumer loyalty. Internet users consider themselves to be members of a virtual community and zealously guard the quality of that community (which is why unsolicited junk e-mail is not an option for Internet marketers and must never be attempted). The most successful Internet store fronts will be those that provide much more than information in a variety of mediums. Success will go to those who enter fully into this new paradigm and transform their marketing messages into a interactive, dynamic community presence.

The Goal

The Costs

New Opportunities in the New Paradigm

It is striking to remember that only 150 years ago the vast majority of people owned the tools that they used to earn a living. But since then the industrialization process led to the introduction of very expensive tools (factories) which could be owned by very few people. The result was disenfranchised and de-skilled workers who were at the mercy of the factory owners. Now with the globalization of the work force industrial jobs constantly shift to low-wage nations. Post-industrial manufacturing wastelands in North America are testimony to the effect of workers-without-tools.

But today we are leaving behind the manufacturing age and entering the information age. With a new paradigm has come a new "factory" (the computer), and as a result, access to ownership of means of production is being lowered to the middle classes. Information now has real economic value. Information itself can be a product. And information-based products and services, or information about products and services, can now be delivered to local, national, or international consumers over the Internet.

More than ever before, information creates jobs, improves production, and impacts upon the heart of our national economies. The paradigm of the wired information age has ushered in both a new means of production (the computer) and a new means of dissemination (the Internet). Because they are affordable, the computer and the Net have democratized access to tools and access to markets.

In the receding paradigm, not only were tools and markets under the control of monopolies, but mass communication itself was severely controlled. This control took the form of either state ownership of mass media, or corporate sponsorship of media through advertising (which brought with it a significant degree of content control).

Now the times are rapidly changing. For the first time in history, the small business world has affordable access to mass communication and global markets through the Internet. Cyberspace is in fact a political catalyst that is democratizing access to mass communication, markets, and tools for economic independence. This is why regional and national governments see the development of information highways as the key to international competitiveness, economic growth, and liberation from the influence of multinational corporations. (No government wants to see economic influence move outside of their domain of power.)

The engine of our economy, small- to medium-sized enterprises, has had a definitive limit to growth placed upon it. This limit to growth was the cost of advertising and marketing to national or international audiences. To compete in the "brand name" game required tens of millions of dollars for advertising alone. Up until the new paradigm of the wired information age, small businesses were destined to remain small.

Now a twenty dollar per month Internet account can serve as the foundation for a global advertising campaign. Imagine what will happen to our economic growth when every small business, every entrepreneur and every job seeker has access to the power of global marketing through cyberspace.

This is not the end of the story. The Internet marketing genius who will redefine the marketing industry has yet to appear. The innovators that will discover the power of producing low volume, high profit products marketed to global consumers over the Net are still cutting their teeth on the Web. The vast majority of businesses have no idea how to prepare for the benefits and dangers of the emerging paradigm.

The future is coming towards us down a fibre optic cable at light speed, and when it arrives, we will marvel at how things have changed.

This article is written by Michael Strangelove.
November, 1994

Among many sectors of cyberspace, the commercial Internet is the fastest growing; it is doubling in size every year. Advertisers spend billions of dollars every year to communicate their messages to their prospective customers. Now business has discovered that it is possible to advertise to the Internet community at a fraction of the cost of traditional media. Internet advertising is a fascinating opportunity to be seriously considered. First of all, there are tens of millions of electronic mail users out in cyberspace today. Advertisers have now found a way of directly communicating to consumers in cyberspace through Internet advertising and have recognized its importance and potential benefits over existing mass media.

Internet advertising is not a new phenomenon. The Internet was introduced in the mid eighties. At that time, it was used mainly for academic, scientific, and technical communities. Even in this early period of the Internet, commercial activities were there because of their support of research efforts. Advertising has been taking place on the Internet since its beginning. Now it is a large, growing community and institution, therefore, we know it will attract more attention from commercial people such as advertisers, advertising agencies, software developers, technicians, and marketing consultants.

The Internet is not a mass market, nor does it represent a mass market such as TV, where millions of viewers are receiving a homogeneous message that is packaged and controlled by advertisers. The Internet market is "micro communities with distinct histories, rules, and concerns, which are gathered into thousands of discussion forums ranging from hundreds to thousands of participants ... no groups of millions."

Advertising plays important roles in the Internet. Lowering the cost of the Internet service is one of these roles. One survey result shows that one of five users of the Internet stated outright that they would not pay for access to WWW sites. This is indeed alarming for those who want to apply a subscription business model to the Web. But meanwhile, this unwillingness to pay money to access WWW sites can be a green signal for the advertisers, because they can make consumers' access to the WWW sites affordable by paying advertising money to the site owners. It is the same mechanism which works for all other existing media, such as TV, newspaper, magazines, and cable.

It is the advertisers who make consumers' access to all media inexpensive and affordable. Free access will attract more people to the Internet, and Internet ads will make it more profitable. Maybe someday advertisers will be willing to provide free software or CD-ROMs or even computers to consumers in order to attract them to the their advertising cyberspace. Actually, the market for Internet advertising is one of the fastest growing. Although it is still tiny--$50 to $100 million of the nation's $170 billion ad total--it will grow quickly over the next few years.

Another important role of advertising in the Internet is that advertising itself is an important information source and thus attracts the attention of Internet users to specific information sources. For that reason, advertising in the Internet pleases citizen groups that support low cost information services. In short, advertising plays a positive role in the Internet: lowering the cost of the services, providing good sources of information, and attracting Internet users.

The Internet is the advertising vehicle of the future. Advertising in the Internet is different from that in traditional mass media in many ways. To establish an effective advertising presence in the Internet, new skills in media strategy, message strategy, and creative strategy are required. To develop these new skills, advertisers should first understand the new medium's attributes and the resultant shift they cause in the advertising context. The two key attributes for advertising in the Internet are "control" and "dynamic addressibility." Control means the balance of power between advertisers and customers. Dynamic addressibility pertains to an individualized or customized advertising message that addresses individual customers' needs.

Four major characteristics and advantages distinguishing the Internet from other existing media can be summarized: 1) low cost, 2) high speed and flexibility, 3) content-orientation, and most importantly, 4) interactivity or two-way communication. First, the cost of Internet advertising is still relatively low. For example, it is $30,000 per two months to advertise in HotWire; $40,000 per three months in Netscape Home Page; $ 7,500 per week in NCSA What's New Page; and $4,000 per week in Prodigy Home Page.

Second, advertising in the Internet can appear immediately. It takes about six weeks to advertise in the New York Times, but in the Internet, it takes a lot less time, possibly an hour if the need is urgent. You can also change your ads as quickly and as much as you want because of its low production costs and flexibility.

Third, different from the existing media where style and image are important, the Internet advertising should be oriented toward content. The main language of the Internet is low ASCII (Aa-Zz, 1-9 text plus a few miscellaneous characters). It is more than a mainly text based environment; it is first and foremost an oral culture where the keyboard mediates the spoken word and visual to a complex matrix of subcultures among users numbering in tens of millions.

Fourth, the Internet offers an alternative to mass media communication. Advertising on the Internet is two-way communication between advertisers and consumers. Consumers can now talk to advertisers while they watch advertising on the Internet. The Net already supports many applications for real-time two way communication : e-mail, USENET news, FTP, Telnet, Global Information Access and Retrieval Systems such as Gopher and WWW.

A lot of new skill sets are needed to create interactive web advertising. Although advertising agencies and advertisers recognize the importance of the Internet as a powerful advertising medium, many advertising agencies are not well equipped with required skills. Then who is? Multimedia people--those who do interesting things with multimedia- authoring tools--and ad people should work together to create interactive advertising. We do not know exactly what interactive advertising will look like, but there are several guidelines advertisers should follow : 1) Concentrate on "meat" or hard facts; 2) Do not underestimate the intelligence of customers; 3) Be truly interactive; 4) Treat the customers like a king; and 5) Have fun.