In Catalyst

The traditional definition of advertising is that it is any paid form of sponsorship. And the main purpose was to induce a sale. However, in the recent past, it has been fashionable to advertise just to be visible and sustain a high profile. Now, with the advent of the internet and E-commerce, advertising is going back: Back to those glorious times when the sole purpose of advertising was to make a sale. Advertising in any form has never been interactive till the last couple of years for a simple reason: The media available did not permit interaction. Well, advertising, over a period of time, was interactive, in the sense that marketers and ad agencies took the feedback from the audience into consideration when launching the next campaign. But then, is this what we are talking about?

At present, when one talks about interactive advertising, it means the choice that is offered to the audience. Interactive advertising is possible in basically two different types of media, both with a huge dependence on computing power. One medium is the disk-based medium and the other is the telecom based medium. Examples of disk-based media are multimedia interactive presentations on CD-ROMs, CD-Is, and, to a lesser extent, floppy disks. Telecom-based new media include commercial on-line services, Internet and World Wibe Web services, and also interactive kiosks.

The internet seems to be more popular as an interactive advertising medium than disk-based media. The internet offers some straightforward advantages: One, establish a really interactive communication link with customers; two, display ads to millions of people hooked on to the net, 24 hours a day, and all over the world; and three, the advertiser can change and update ads faster than any other media.There are other advantages that are not immediately appreciated.

The first major advantage is customisation. By the time a query comes in through the different hypertext links, the different filters finetune the content that actually reaches the audience. Different customers need different levels of communication and also need different kinds of information. It is possible to achieve that kind of flexibility with interactive advertising.

The next major advantage is speed. We could discuss speed in interactive advertising in different contexts. Firstly, as mentioned earlier, change and updation is very quick. In another context, the customisation of the ad takes place very quicky: so quickly that the audience does not realise that he is actually being presented a unique advertisement. Quickness also matters because the audience should not turn away from the ad for: One, delay in response; and two, outdated or non-trendy statements.The next advantage is the product of two important qualities: comprehensiveness and accessibility. The amount of information that can be stored and passed around in the Net is amazing. In fact, it is these advantages that gives the internet (and interactive advertising) the base for all other advantages. An additional force is added to the two qualities by the virtue of searchability.

New interactive media are also economical in terms of reach, communicating to the right person and also in terms of production. The reach is a whopping 34 million people worldwide and 21 million people in the US alone in 1997. It is expected to touch 142 million worldwide and 71 million in the US by the year 2000 (Figures by e-land from webnet-marketing, inc.). As to costs, some companies charge as low as USD 29.95 for a three page internet location and HotWired, the electronic service of the magazine Wired, which signs up advertisers who pay USD 30,000 for a six-month run.

The final and possibly the most telling advantage is that interactive advertising helps complete the transaction of the sale itself. In case of products not transferable through the net, the customer normally registers for the product and it is sent to him by mail. In case of software and products that can be transferred through the internet, the buyer is allowed to download it right away. The evolution of E-commerce plays a very important role in this ability. Payment is made by registering the customer's credit card number and then the transaction is cleared. The internet offers an audience that is predisposed favourably to shop on the Net: According to Iconocast, 42 per cent of internet users are women; 65 per cent of internet users access it from a PC at home and e-land describes the typical internet user in the US as having a median household income of USD 60,000 and 70 per cent of internet users as having college degrees. What this means is that advertising on the Net is a very viable (and very profitable) proposition.

There are, however, some straightforward disadvantages too: One, the reach of the internet is not very high in developing countries; two, security and secrecy of transactions are still a problem; three, language barriers; and four, the audience has the choice in viewing it. Leading online ad markets in 1996 outside of the US were Japan, Germany, UK, the Netherlands, Australia/NZ, and Scandinavia (figures by Jupiter Communications). Not one of the developing countries figure in this list for a simple reason: lack of penetration of internet services. In fact, not even some of the more advanced countries like Canada and France figure in the top five.

Security of transactions is still a problem but is not expected to be a major hassle. Industry sources argue that you could have problems with your credit card when you check with a waiter in a restaurant or when you check out of a hotel or even with the florist. They argue that the insecurity is purely due to psychological reasons rather than any actual damage. True, there have been instances of fraud, but that's not as common as credit card frauds in the usual business transaction.

Language barriers are a problem especially when the ad is available only in one language and an international customer is not completely comfortable with the language of the ad. Some sources suggest using translation software but the general feeling is that it is not a very pragmatic solution for ads where certain styles, usages and idioms may not translate exactly with the same meaning. However, this problem now has a solution because of a new trend in web advertising: Think globally, brand locally; Regionalise content.

The last disadvantage is particularly telling, especially in light of the basic principles of advertising viz. attention, interest, demonstration and sale. In the case of a print or television ad, the reader or viewer is forced to see or watch at least part of the ad by which time the damage is done (meaning: the audience sees or hears the brandname). In the case of the internet, the netsurfer has complete freedom to totally disregard an advertisement. This is where all the ingenuity of the advertiser comes in. It is not enough to just publish your print media copy on the web and use your TV ad as a visual relief or support. It is imperative that the ad is completely developed from scratch for the Net.

These disadvantages notwithstanding, Web advertising revenue in 1997 was USD 170 million, expected to rise more than four-fold to USD 800 million in 1998 and is predicted to cross the USD 2.5 billion mark by the year 2000 (ad revenue figures by e-land). Online shopping revenue in 1997 was more than USD 2 billion (women made purchases for close to USD 1 billion). Total online shopping revenue for 1998 is expected to be close to USD 4 billion and predicted to cross USD 7 billion by the year 2000 (shopping figures by Jupiter Communications).

``There is no doubt about it that this medium is far and away the most controversial medium in our business today. It is also the most frightening, time and personnel-consuming, and most expensive.''``As a result of this combination of impediments, many of us are prone to look solely at the problems of the medium, and thus overlook its values.''American Association of Advertising AgenciesFrom a meeting on the 1930s, regarding the use of television as an advertising medium.