A Short History of Advertising on the Internet #1

Since the advent of the internet, people have been using it to shill their wares. But how did the unique methods of advertising online pop-up? How was the amazing technology behind programmatic advertising develop and how did the likes of Google and Facebook become such behemoths in the world of online advertising? These are the topics we’ll be looking at in part one of a two-part piece on the history of advertising on the internet.

Before the development of the internet, as we know it today, there were a number of networks of different research laboratories and universities across the United States. The two best known of these predecessors to the modern internet were known as ARPANET – the Advanced Research Projects Agency network and NSFNET – the National Science Foundation Network and it was on these primitive networks where advertising online began; using unsolicited mass emails, which would later become known as spam.

The first spammer, Gary Thuerk, selected 400 email addresses from the ARPANET directory, a physical directory – like a phonebook, and as he told NPR in 2008; “There were about 2,600 people on the Arpanet that time. And I checked off about 400 names and I composed the invitation to come see a demo of the new product.” That product was a new computer which Gary was trying to sell on the west coast of the US. The message read:

 

WE INVITE YOU TO COME SEE THE 2020 AND HEAR ABOUT THE DECSYSTEM-20 FAMILY

AT THE TWO PRODUCT PRESENTATIONS WE WILL BE GIVING IN CALIFORNIA THIS

MONTH.  THE LOCATIONS WILL BE:

TUESDAY, MAY 9, 1978 – 2 PM

HYATT HOUSE (NEAR THE L.A. AIRPORT)

LOS ANGELES, CA

THURSDAY, MAY 11, 1978 – 2 PM

DUNFEY’S ROYAL COACH

SAN MATEO, CA

(4 MILES SOUTH OF S.F. AIRPORT AT BAYSHORE, RT 101 AND RT 92)

A 2020 WILL BE THERE FOR YOU TO VIEW. ALSO TERMINALS ON-LINE TO OTHER

DECSYSTEM-20 SYSTEMS THROUGH THE ARPANET. IF YOU ARE UNABLE TO ATTEND,

PLEASE FEEL FREE TO CONTACT THE NEAREST DEC OFFICE

FOR MORE INFORMATION ABOUT THE EXCITING DECSYSTEM-20 FAMILY.

 

It was 1978, and ARPANET was technically meant to be for specific government business. There were policies of acceptable use for the system, which Mr Thuerk has flagrantly disregarded. But, it allegedly led to some sales for him and as the text-based internet developed, spam advertising across email and USENET groups proliferated.

Over the course of the 1980s and early 1990s, there were huge steps for computing and the internet. The development of the World Wide Web by Sir Tim Berners-Lee and the development of graphical operating systems, replacing the command line interfaces that preceded it allowed the creation of Mosaic: one of the first graphical internet browsers – you can probably see where I’m going with this. Content production on the internet at the time was naturally funded in a similar way to the print content that it was based on; either through a sponsorship of the website (as the US retailer Sears did with Prodigy, a joint venture between them and IBM) or through the sale of advertising space.

The first banner ad: a black strip reading "Have you ever clicked your mouse right here?"

Image Source: www.thefirstbannerad.com

Global Network Navigator, an early web publisher was the first website to feature a clickable, hyperlinked link – before that, banner ads were simply basic images. But it was an AT&T ad on Hotwired, the online arm of Wired Magazine was the first website that was the first mainstream example of what they called – and we still call –  a banner ad. You can even go to www.thefirstbannerad.com and see a live example of the user experience.

In short – it was awful. It’s a terrible ad, it looks like a magic eye picture, it’s not clear that it’s an ad at all and you have no idea what it’s advertising unless you click through. In fact when you did click through it took you to an AT&T sponsored digital tour of art galleries, which no doubt looked magnificent for the time on your 16-bit Windows 3.1 machine. Despite its flaws, the ad had a click-through rate of 44%. I guess that you get a free pass when you’re the first to create something.

The ability to monetise through banner advertising gave content producers a big incentive to get online and led to a boom in websites, particularly from professional publishers, taking their newspapers and magazines digital. As the number of available publishers grew, advertisers became more interested in ensuring that their ads were shown to relevant audiences and the first digital agencies popped up, helping to ensure that adverts were being shown on sites which fit the audience that they were trying to reach, based on average demographics.

We also began to see the first Display Advertising tools appear like WebConnect’s custom view, which introduced the idea of frequency capping – limiting the number of times that a particular user saw a particular ad, or Doubleclick’s Dynamic Advertising Reporting & Targeting or DART which allowed you to track and understand the return on investment from your banner advertising.

Despite all of this innovation, the mass proliferation of banner advertising led to users becoming fatigued. Whilst the first ad may have got nearly half of all visitors to click, five years later you’d have been lucky to get even 10% to interact with your advertising and this led to ads becoming more garish and more annoying, leading eventually to the invention of an ad format that has been called “the internet’s original sin”: the pop up.

An example of a particularly annoying pop up ad

Image Source: blog.yoocare.com

The pop-up ad was designed by Ethan Zuckerman for Tripod.com, an early example of a free web hosting service where users could make their own personal homepage which was then, incidentally, analysed to better target advertising between visitors. However, the content on these pages could be somewhat risqué – we were very much still in the pre-quality control period of the internet – so advertisers were keen for their ads not to be placed near any off-colour content, lest it is seen as an endorsement. A simple, effective solution for Tripod was to simply have the adverts pop up in a new window. You can see a noble intention, but in the wrong hands, this became to online advertising equivalent of just having someone stop you in the street at every turn to tell you about the wonderful features in a new Mercedes.

So, an interesting point about the history up until this point is that fundamentally, online advertising has only marginally moved away from the direct mail and print advertising industry that its early models were based on. Yes, we had frequency capping and ROI tracking and we could make ads pop up in a new window and we were even starting to get a scary amount of value from web cookies, but in the first few years of the World Wide Web, we hadn’t seen the technology really lead to new advertising methods or business models; that’s what we’ll be covering next time and it’s where the story really gets interesting.

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