by Gary Welz
Web Advertising IV: DoubleClick, Inc.
My last advertising-related internet.com column stated that accountability was one of the required characteristics of a publication--meaning that buyers expect to be given complete and precise information about the number of people who see their banner and, in some instances, fairly detailed information about who those people are.Several services have been created to provide that information. One of the best known is IPRO, which offers the performance measurement service, I/AUDIT, and a variety of other products and services. I/PRO describes itself as "the world's leading provider of Internet-based ratings, research and performance measurement solutions that enable advertising and marketing professionals to optimize their one-to-one marketing programs on the Web."
IPRO is allied with the long-time provider of television ratings--the A. C. Nielsen company--and recently announced that it was forming a partnership with DoubleClick Inc., a company that has evolved from a banner placement service to one that provides comprehensive account management services for Web publications. The objective of the partnership is to make ad targeting on the Web more accountable than ever.
DoubleClick CEO, Kevin O'Connor says,
Together we will fill a void in information and understanding of the changing Internet marketplace. We will further the growth of the new media industry by combining the very best in data and analysis. The result will be a powerful tool for the creation of Web marketing and advertising campaigns that simply doesn't exist anywhere else in the industry.I/PRO has also recently partnered with Netgravity, the maker of a Unix software product called AdServer that allows publishers to gather traffic information themselves."I/PRO offers the leading measurement and auditing services and has chosen to fully endorse the NetGravity AdServer to offer our customers the premiere solution for Internet advertising." said Mark Ashida, president of I/PRO, "I/PRO clients using AdServer will now be able to deliver to advertisers faster, more customized reports. Together I/PRO and NetGravity offer a complete, reliable solution upon which advertisers and Web sites are standardizing." DoubleClick is also a component of this alliance.
DoubleClick was born at the highly regarded Web shop Poppe Tyson, a division of Bozell, Jacobs, Kenyon & Eckhardt. Initially, it placed banners on a number of sites, including Netscape. The company was like an advertising rep firm, matching advertisers with sites that had "inventory" or empty pages to sell. As the ad business developed, Netscape and others brought the ad sales function back in-house so they could hold on to more of the money.
DoubleClick evolved, too, casting itself as the creator of the DoubleClick Network, a collection of sites used to sell targeted packages to advertisers. The magic behind DoubleClick's service is its ability to deliver highly targeted "eyeballs" to advertisers and to do so in a precisely measureable way.
When advertisers buy a "package" with DoubleClick, they buy something like "a million impressions of U.S. males, age 18-34, who are surfing the Web using Window's platforms." The advertiser's banners are kept on a DoubleClick server and delivered to users who fit the description while they're viewing any one of more than 30 independent sites.
Since its launch in February 1996, the DoubleClick Network has attracted over 7 million users and expects that number to go over 10 million by the end of the summer. It has sites in four topic areas: business, technology, directories, sports and entertainment, and news, including USA Today Online, Doonesbury, and the Quicken Financial Network. Its advertisers include Microsoft, IBM, Intel, and UPS.
O'Connor says his company is like a broker with NASDAQ--the association of brokers that sells stocks in the "over-the-counter" market. They bring users or "eyeballs" and buyers together, and the ads never touch the publications Web site.
The DoubleClick Network is a very broad horizontal one; the CPM-paid-for banners on it range about $30. O'Connor foresees a tremendous growth in vertical markets--affinity groups with interests in, for example, healthcare or investing. He is in the process of creating new networks that appeal to far narrower target audiences and higher CPMs.
Initially, DoubleClick helped sites like Netscape make the transition from being sites that accepted ads to ones that have their own sales forces and aggressively pursue sponsors. Now its mission is to provide a whole suite of services that meet the needs of publishers and sellers, which include selling, analyzing traffic, reporting to clients, and even billing. It wants to put its clients in the position where all it has to worry about is what it does best, which may be just creating a great site and getting traffic, or which may include selling ads--not necessarily providing all the things an advertiser needs.
DoubleClick also sees itself as a provider of "solutions" for Web advertisers. It will work with an ad agency and construct a campaign that might involve 5 to 10 ad placements. It'll also test the efficacy of banners by putting them into a rotation for a couple of days and reporting the varying click-through rates back to the advertiser. It recommends that at least five banners be created for a campaign. "No one can guess which one will do best," chortles O'Connor, who says that advertisers love the ability to try their creativity and get feedback quickly and inexpensively.
Another important new technology that DoubleClick will be implementing in the Fall is called "probes," which lets the company track not only the number of impressions that a particular banner gets, but also the number of clickthroughs, leads, and sales that it generates. This is a tremendous advantage for advertisers because it allows them to know precisely what their costs are. Although some publishers may balk at it, it allows them to base their rates on something besides impressions. It will likely result in the creation of complex rate structures that feature mixtures of different rates for each type of result.
This begs the question of whether the Web is moving toward a transaction-based business model. O'Connor believes that transactions will be very big this coming Fall and Winter, which is not to say that branding is going to fade. He thinks that branding will continue to be an important rationale for Web advertising, especially for high-involvement consumer products like automobiles.
O'Connor thinks that Web advertising in general will be "huge" in the fourth quarter and into next year, and that there will actually be a shortage of ad space, especially technology slots. He says he needs more technology sites delivering over a million impressions a month. He's also big on sites offering financial services because credit card companies and banks are very eager to advertise on the Net.
How are Web sites themselves evolving? He thinks they're moving away from content as we've know it and toward applications, especially databases. He mentions, especially, Inquiry.com, a free service for software developers, providing information on software products, development techniques, and emerging technologies. But that's fodder for another column.
