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Looking back on 25 years of digital advertising – Part one

As total digital revenue in New Zealand continues to climb, it’s time to look back at how we got here and celebrate the first 25 years of digital advertising. Graham Medcalf talks to a few digital pioneers, as they reminisce and reflect on a quarter of a century of struggle against the odds.

To celebrate 25 years of digital advertising, Adobe suggested marketing and
advertising veterans think back to what they were doing in 1994. “Camping by fax machines or mocking up print ads,” were two of the suggestions. Some were probably approving a TV commercial on a U-Matic tape player.
The internet was a novelty, and many thought it would have little impact on our lives, at least not as much as it has changed the way we live and work as dramatically as it has. We were just getting used to working on a desktop computer and trying to figure out how to come to terms with the formulas on Excel and creating presentations on PowerPoint.

1994 was, however, the year the first banner ad appeared, and the age of digital advertising began. The first digital banner ad was created by Wired magazine in the US and asked, “Have you ever clicked right HERE?” Many did, and a new age of digital advertising began.

One of the early New Zealand adopters was Touchpoint’s, Steve Shearman. In January 1996 he launched a search/directory website ‘Access NZ’– New Zealand’s first Yahoo. At that time, it listed all New Zealand websites – probably fewer than 200.

“As part of that site we sold banner advertising – possibly that was the first website in New Zealand to do this,” Shearman remembers. “The very first ad was for our web development company ‘Webmasters’.”

Although Webmasters made some money selling advertising to numerous advertisers over the following seven or so years – it was the thinking and technology behind that database-driven website that allowed the start-up to win contracts with ClearNet and Yellow Pages, two key projects that established the company over the following two years.

New kid on the block

Touchpoint solved that problem by partnering with forward-looking direct marketing agencies and learning quickly together. There were a few ad industry stalwarts in the early days who thought digital media wouldn’t catch on, and for a while some in the mainstream media weren’t very helpful. There were, however, more proponents than detractors and generally the advertising and marketing community worked positively to try to get the best out of digital media. John Schofield, now managing partner at Tilt Digital, was an agency account director at Telecom Directories in 1994. His first banner ad campaign launched when he worked for Yellow Pages.

“I’m not 100 percent sure who it was for,” he recalls. “It was dial-up days, with slow connections. The good old 468×60 banner was the only ad unit we had to play with, trying to do both direct-response and brand work in that one small format. Fun times.”

Schofield went on to form The Internet Bureau in early 2000, where he stayed for eight years, pioneering innovations in digital advertising. Around the same time, Jane Ormsby, founder and managing director at Scroll Media, was a shopping channel executive at Virgin Media in the UK, moving to Real Media in London as a senior account manager in 2001. The first digital campaign she can remember selling was a British Airways campaign on major broadsheet timesonline.co.uk “which was a thrill at the time”.

“In the early days, online was seen as the poor cousin to TV and print and we had to work super hard to convince clients to consider a digital campaign in the mix,” she says.

The primary challenge for those early adopters was educating clients who were not convinced that digital was going to grow. “We had to educate them with thorough reporting and analytics,” Ormsby says.

Moving to New Zealand in 2004 and forming Response Directive, Ormsby found most advertisers only considered locally-known sites. “We had to convince the market that Kiwis look for international content, nowadays that’s a given.”

Shearman recalls that it wasn’t even called ‘digital’ in those early days and it certainly wasn’t considered real marketing by the majority of marketers. “Apart from publishing a brochure form of website, the web wasn’t really considered a marketing channel by the majority of companies or marketing agencies.”

The challenge was to get major brands to take the digital channels seriously and invest advertising budgets in the new medium.

Director of FutureYou.Digital, Michael Te Young, was a digital product manager at the NZ Herald in 2002/2003, when the publisher developed ‘the big banner’, which was 760×120 and ran along the top of the site where banners still run today. This was before the 728×90 leader board had been invented. Back then NZ Herald sold placements on a cost-per-week basis. The ad looked great until Te Young discovered that the small tile in the top right-hand corner had been sold to a second bank by another account manager.

“Of course, everything hit the fan for the big banner bank,” recalls Te Young. “The small tile bank was quite happy with itself. It caused us to develop a booking system for conflict management.”

When Te Young became the digital account director at Wilson & Horton Interactive (NZME) in 2003, online revenue was less than one percent of overall revenue. The bottom had dropped out of online advertising because its reputation as a medium had been destroyed as a result of many global companies being burnt in the Dot-com crash. Local examples included Flying Pig and Travel.co.nz

Because online budgets were so small, online simply became an adjunct to a traditional campaign. Agencies outsourced planning and execution to The Internet Bureau, which was largely responsible for nursing the industry back to life, however, it took some several years before agencies started to take digital seriously again and assume some ownership. This probably set back New Zealand’s progress behind other markets like Australia.

One of the early issues for the digital media industry was the amount of time and resource it took to plan and run a campaign. Schofield recalls having several conversations with agency media directors who had variations on the message: “I can see how this is useful for our clients, and they’re interested, but to be honest it’s too bloody hard and there’s no money in it.”

Those conversations were what led Schofield and John Stewart to launch The Internet Bureau in early 2000. That business went on to bring some fantastic people into the industry and made it easy for clients to get into digital media.

“There have always been challenges,” Schofield says. “But long term the challenges have been maintaining a balance between optimistic innovation and cynical realism. An optimistic outlook has helped uncover and develop some strong digital media platforms, but a degree of realism is required to help reduce wasted effort and budgets charging off down blind alleys!”

“Spends were small in the early days because we didn’t have the audience size and ecosystems that we do now,” Te Young says. “Mobile web didn’t exist (it was called WAP), there were no networks, social media or data-driven planning. Search was in its infancy. Creative was limited to JPG’s and GIF’s. So, it lacked scale or sophistication.”

Rob Davis was a director and founder of Pearson Davis in those early years. “We were working with Vodafone when TXTing technology came in,” he recalls. “We promoted the shit out of it because Telecom’s technology didn’t allow TXTing. When it became cool to TXT, the young ones all moved over to Vodafone. It was probably the start of our market share grab. Funny to think that today, I believe that Spark (Telecom) is similarly thwarted moving over to 5G technology.”

In the early 1990s, such was Pearson Davis’ reputation in database work, that it was entrusted with the amalgamation of customer accounts when two banks merged in New Zealand. The agency’s database work also won favour with Air New Zealand, and it set up the Air Points Frequent Flyer Programme with them. Not only all the marketing, but the call centre as well. 

The first banner ad Sam Ramlu of Method Digital remembers doing was for Australian Tourism and the ‘Shrimp on the barbie’ campaign. “It was an expanding banner that let you flip the prawns – all in the name of getting you over the ditch.”

Banner sizes were always “the bane of our life”, Ramlu says. “Trying to fit all that functionality into 25kb or 40kb! Yikes! Even a simple word doc was bigger. Especially when we were always trying to push the boundaries with creating interactive banners that cut through.”

Ramlu is struck by how long it took clients to move from traditional methods and commit to digital. Or to think about digital as a medium in its own right.

“We often had requests to put TVCs on websites, as the intro.”

More often than not that “skip intro” button became very popular.

“Once we were even told to put a radio ad as the intro and it didn’t matter how much we pushed back, the agency insisted. Suffice to say that campaign was a bit of a fail.”

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