Digital Essays: A short history of the web

Progressive marketers are following their audiences online as the internet comes into its own.

On the official website of Tim Berners-Lee, the brains behind the internet we all know and love, he outlines his original plan for the World Wide Web. His dream was of a "common information space in which we communicate by sharing information; a realistic mirror of the ways in which we work and play and socialise". That's quite some dream, but it's by no means unrealistic.

Online has come a long way from the days of the static banner and frustrating dial-up to the broadband "wonderland" of today, rich in information and interactive content. Although I didn't see it myself, I'm pretty sure the first online ad was served 12 years ago in the US from AT&T. It was a basic 468 x 60 banner with an arrow pointing to the right-hand corner, which read: "Have you ever clicked your mouse right here? You will." Nostradamus couldn't have said it better.

Here in the UK, the first banner is believed to be from Barclays on the Electronic Telegraph a couple of years later, and it's interesting that finance remains an innovative, high-spending sector within online. You'll remember how excitement grew to fever pitch during the late 90s. The internet world would replace newspapers and magazines, we'd buy everything online, high streets would become ghost towns; our lives would never be the same. We all know what happened next ...

At the height of the dotcom boom, annual online adspend in the UK was running at £49.4 million. Six years after the dotcom crash, internet advertising has come back with a vengeance, hitting £1.4 billion in 2005. So what have been the key drivers?

Well, in true acceptance-speech style, none of this would have been possible without broadband. There's an inextricable link between the growth of internet advertising and the rapid increase in broadband penetration - broadband is now enjoyed by around 80 per cent of home internet users.

As such, the experience is more rewarding for the user and advertisers are able to exploit this with richer, better and more engaging display ads.

Of course it's not all about display. Search is often seen as the "gateway" to online for advertisers, and many are testing the waters with pay-per-click, seeing the incredible return on investment and diving in for more.

Paid-for search advertising is in fact the fastest-growing online ad format, seeing a 78 per cent year-on-year increase to £768 million in 2005.

For most consumers, their online session begins with search activity, so whether you're a big automotive advertiser, small retailer or regional business-to-business marketer, paid-for search is route one to your brand.

Apparently, the Google results page for "Ford" is more popular with internet users than the Ford homepage itself. Impressive stuff.

So when advertisers want to follow their audiences online and attract their attention, what can they do? Well, they have the opportunity to produce really powerful, engaging rich media and over the past few years we've seen some amazing creative work. Progressive marketers have embraced this with gusto and are delivering effective creative campaigns that are fully integrated with all other media activity. For them, online is no longer an afterthought. They understand what consumers want from the internet, and it's more than just press or outdoor ads served online. Most importantly, consumers enjoy the opportunity to interact with brands at their own convenience.

Remember "subservient chicken"? If you don't, he (or she) lives on at Thanks to Burger King, this was the original interactive ad. Who would have thought that telling a man (or woman) dressed as a chicken to dance would be so entertaining? But the consumers loved it; interactive content with a less overt ad message, and they were completely in control.

It looks as if the consumer really is king, and the growth in online goes hand in hand with this concept of consumer empowerment. Internet users have the option to research, compare and purchase products, and that's exactly what they're doing. The rise of e-commerce has been incredible.

Last year, according to the Interactive Media in Retail Group, we spent £20 billion on products and services online, representing a 35 per cent year-on-year increase. The death of Dixons on the high street and its resurrection online is a well-documented result of this, and is surely just the start. More and more, companies are putting digital at the heart of their business; not just retailers but finance organisations, travel companies and, of course, media agencies.

But we shouldn't get complacent. This is just the beginning and the industry has a lot more work to do. Online is now securely in the mainstream and advertisers are continually being converted to the medium. But I'd be lying if I said others didn't need a lot more persuading. Every week, someone asks: "When will online plateau? Surely it can't keep growing at 60 per cent every year?" Well, that's true. It would be impossible to maintain this growth forever. But the internet still represents only 8.4 per cent of total media spend and there's a lot on the horizon.

Currently, most online ads are direct response. The increase in rich-media ads will prove its brand-building credentials and could be the real catalyst for winning over the all-important FMCG crowd, who have so far been somewhat reluctant to switch their budgets. Search still has a long way to go; using PPC intelligently and strategically can drive sales and build brands. Growing at its current rate, it could be a 10 per cent medium in its own right by the end of the decade.

Look a bit further and we have internet protocol TV, which is broadcast-quality content delivered via the internet. Ofcom predicts that by 2012 (when we all go digital) more than 50 per cent of Britain's households will watch TV over the internet. This holds incredible advertising opportunities in itself, but the impact that internet-protocol TV will have on our media landscape remains to be seen.

Then we have the "online communities" phenomenon. You'd be extremely uncool not to have your own page on MySpace as a result of the undivided press attention Rupert Murdoch's new baby and other similar sites have received recently. For me, they epitomise the appeal of the internet; entertaining, sharing information, and empowering consumers. Exactly what Berners-Lee had in mind.

- Guy Phillipson is the chief executive of the Internet Advertising Bureau.