In 1994, Wired magazine ran a cover that showed a couple of famous American ad men of the time, plus the US ad icon, the Pillsbury Doughboy, blindfolded and up against a wall. They were about to be finished off, firing squad style, by a series of TV remote controls. The accompanying blurb asked whether advertising was "finally dead?"
It went on to ponder whether the age of online interactivity would mean the end for traditional advertising. Fast-forward six years. Now you can't escape from traditional advertising taken out by companies whose business is the internet - either pure internet companies or so-called clicks and mortar operations.
The dot.coms fill up the commercial breaks on TV and radio. Buses and taxis inevitably feature a pitch for some new net company on their sides. Your daily newspaper is packed with dot.com ads. If you live in London and go to work on the tube, you'll see a few more. And if you buy sandwiches and coffee, your paper bags and cups may also feature "ambient" spots put there by the latest hot new net start-up looking to build brand awareness on a budget.
Perhaps the dot.com ads stand out because they weren't around a few years ago. And if you live inLondon, you see a lot more than you would in the rest of the country. "There are a few high spending dot.coms who are running regional as well as national TV and radio campaigns," says Caroline Sceats of net research firm Fletcher Research. "However, there isn't anything like the level of spending on outdoor advertising as you see in London."
That said, figures back up the general impression of a dot.com ad overload. According to Fletcher Research, spending on ads by companies involved in the net has been growing at an exponential rate, increasing four-fold over the past two years. Figures released by AC Nielsen show that in 1998 dot.com companies were spending £41.5m on traditional advertising in the UK. In 1999, that figure more than trebled, with around £140m being spent in total.
"The advertising industry does see it as a godsend because they were all worried about the impact of the web and thought they were going to lose out," says Patrick Burgoyne, editor of the advertising trade magazine, Creative Review. "In fact, dot.coms have been the most significant source of new business for advertising in years."
Six years is a long time on the net - an age if you believe the techno-gurus. But even so, there has obviously been a drastic turnaround since that Wired cover. Clearly, the net has woken up to commercial realities and abandoned the anti-ad attitudes it nurtured in the early 90s. More to the point, companies which work on the net have realised two things: first, that to survive they need to build brand identities consumers trust, and second, that traditional advertising is great for brand building.
Two or three years ago, dot.coms might have adver tised first on the net. Now, there's a growing scepticism about banner ads on web pages. They're seen as good for tactical campaigns: good, that is, for telling people who are already online about a particular promotion. But they are not so good for building brand awareness, and they are hopeless for reaching out to the mainstream. And that's what the dot.coms want to do. They want to establish themselves as the major players in their chosen areas as quickly as possible, so they gain first mover advantage and squeeze out potential competition.
To use the e-commerce jargon, there's a virtual land grab going on, and when it comes to staking a claim, traditional advertising (everything from TV and radio to print and outdoor posters) is seen as crucial. It's out there, in the real world, drilling home a tangible brand image to ordinary people who may not yet be online. Crucially, it gives the impression that you are a serious, reliable company like Coke, Ford, Virgin and all the other big names. It seems reassuring to consumers who are still slightly dubious about the net. That's why big dot.coms and clicks and mortar companies are prepared to spend as much as possible on advertising.
The biggest players (Freeserve, Egg and AOL) now spend £10-15m a year on advertising, enough to put them just outside the top 50 companies as far as UK ad budgets are concerned. According to Gordon Macmillan, internet editor at Campaign, everyone else is trying to keep up. "Typically, you're now seeing annual advertising budgets for a fair sized dot.com of around £5-10m." M uch of that money is going on high-profile TV campaigns. Among the more memorable dot.com ads of the last year were the spots produced by Red Handed for the online career agency monster.co.uk. Simon Parker, UK marketing director for Monster, says the company went for TV ads because it "wanted to be first out there to reach people who were getting to grips with the net".
The ads deliberately aimed for a universal appeal. "In the early days of establishing a brand, you're trying to be as inclusive as you can. We want to be that kind of brand. We're trying to appeal to people from all walks of life across the country - you have to be universal. As you grow and find out more about your customers, then you can become more targeted." Dot.coms using TV advertising is an admission, says Creative Review's Patrick Burgoyne, that "TV still reaches far wider audiences than the web, and will for some time to come". However, he argues that it would be sensible for more specialist sites to think carefully before splashing out on commercials. "With cable and satellite channels, you've got access to a more specialist audience. With general ITV slots, that isn't the case. It doesn't make as much sense spending a lot of money just to hit a very diverse audience, only a very small proportion of which are going to be interested in what you've got to say."
Indeed, some of the best known dot.coms have yet to advertise on television - lastminute.com, for example (though it could be argued that, given the amount of press it has received, it doesn't need to advertise). Instead, the company has produced a poster campaign, built around the slogan "do something lastminute.com". It was also one of a number of dot.coms to try ambient advertising. Lastminute.com put its ad messages on sandwich bags in the capital. Lunchtime is a prime time for internet use, when office workers get to do their own thing on the net. So the thinking was that it would help if the company's ad was on their desk with them, wrapped around their lunch.
Other well-known net brands have also eschewed TV in favour of other forms of traditional advertising, in particular outdoor posters. eToys concentrated on press ads and outdoor sites, says UK marketing manager James Bidwell. "We had an eToys ad on one in six London buses, which meant that people saw us on the high street. If you're a pure play internet brand, you don't have a shop front, so this was a way of us getting in front of shoppers, when they may not be having such a wonderful experience, in the rain, with lots of queues." Both Bidwell and Parker say their campaigns were very effective. Indeed, research from Fletcher Research indicates that big spenders such as Freeserve and Egg have achieved high levels of consumer awareness through traditional advertising.
Ad industry insiders are more critical. According to Campaign's Gordon Macmillan: "A lot of current campaigns miss the mark." Last year, dot.com ads were eye-catching because they were new. Now it's getting harder to stand out. Indeed, sometimes, these ads seem to blur into one big commercial for the net in general. It's hard to remember specific sites. To counter that, UK dot.coms may have to imitate their US counterparts.
In America, it's not unknown for start-ups to spend half their initial financing on TV ad campaigns. In January, dot.coms queued up to pay $2.2m for 30 seconds of airtime during the Super Bowl. They were following the example of job agency hotjobs.com, which received huge publicity from an ad during the Super Bowl in 1999. The only problem for hotjobs.com was that their ads generated too much traffic - some would-be users had to wait five days to access the site and post their CVs.
Many UK dot coms are beginning to devote a similarly large proportion of their revenue to advertising, to the potential detriment of their sites and the experience they offer. It's crucial to find a balance, says Fletcher's Caroline Sceats. "Dot.coms have to support the ad spending they need to make to grow, even if it's bankrupting them - because they have to attract customers. Their valuations are based on the number of customers they can get and their future value. To have any place in this market, they need to demonstrate they can get customers. Once they get that, they then have to put money into customer service and customer attention, to keep those customers."
According to Sceats, dot.coms will continue to have to spend highly on traditional advertising for the foreseeable future. As the UK net population increases (Fletcher predicts that 40% of the UK adult population will be online by 2004), so dot.coms will devote more of their ad budgets to online commercials. But the company also predicts that by then, the top 5% of dot.coms will need to spend at least £10m on advertising aimed at building and maintaining their brands. A sizeable share of that will still go on traditional advertising.
"Traditional advertising by the dot.coms won't go away," concludes Campaign's Gordon Macmillan. "These big companies are going to continue to need to build and develop their brands. Advertising is how you do that. If they don't do it, someone will sneak up behind them and take their space."
The good, the bad and the hackneyed
Top of the dots
Monster.co.uk
A series of glum kids talking about their dead-end future jobs. Very arresting, though a little depressing. Smile.co.uk
Contrasted the grey awfulness of traditional banking with the happy world of point and click transactions, helped by the chorus: "Smile, smile, smile." * Excite.co.uk
Men behaving strangely - breaking their car windows after overloading the boot, knocking down a glass of wine with a CD holder - alongside the slogan: "If he can, you can."
Commercial breakdown
Boo.com
Geeky guys attempting sporting activities and making fools of themselves. A well-made ad that failed to explain what boo.com does or even that it was a net company. Letsbuyit.com
Computer animated ants bring home the idea of aggregate buying. The idea explained the site well, but the execution was slated for being tacky and low-budget. AOL
The Oxo family for the new millennium ponder the costs of using the net and receives help from digital assistant Connie. Universally disliked in the ad world, though this may have much to do with creative snobbery.
Ad nauseum
• Making fun of geeks to make you feel superior. (Excite and Boo.com)
• I'd like to teach the world to click - visions of people from all round the world, usually children, delivering the same upbeat message about the net (Cisco Systems).
• Computer imagery: ads that rather unimaginatively show icons, cursors and trash cans (net bank First E), or those which mimic the point and click visuals of the net (Lloyds TSB). • Using the net to liberate the wacky inner you (Yahoo), or to escape from boring routine (IC 24).
Coming soon
• Short sharp shock ads designed to confuse and get you to check out the site to find out what's going on - used by outpost.com in the US; imitated by totalserve.com over here.
• Celebrities - new auction site Fired Up has an ad which features Bruce Willis, and LineOne is putting together a commercial featuring Malcolm McDowell. In the US, everyone from Whoopi Goldberg and Sophia Loren to Lee Majors has fronted dot.com ads.
