Network: Electronic Commerce - Get ready for the electronic billboard

Internet advertising has barely begun, says Mark Vernon, but entrepreneurs are going where the purchasing power is

When Brutus Jeans launched its advertisement on an unsuspecting TV audience, shivers of delight swept through adland. Here was creative genius that would trend-set for a decade. It smashed stereotypes, as the first ad to be targeted simultaneously at men and women. It was cool and funky, as the first ad to use a pop record for a backing track. It was fast and sexy, as the first ad to put smooth body curves in your face.

The fact that Brutus Jeans was bankrupt only months later didn't matter. Levi's and all the rest have been copying it ever since. It worked; it was wisdom; it was ad legend.

Advertisers on the Internet are in search of their own "killer ad". Companies are being persuaded to part with their cash in exchange for a branded banner on a Web site. But before long, these companies must be persuaded that it is worth the expense. Who is seeing it? How many? For how long? Do they like it? Is it working? These are the questions Internet media owners are asking as advertising on the Web shapes up.

In fact, the Internet has already had its advertising triumphs, with downloadable screensavers that have stolen the show and generated below- the-line coverage. The Guinness screensaver (www.guinness.ie) was arguably the first - an online version of the TV campaign, featuring a gawky man dancing around the familiar black-and-white glass. BMW (www.bmw. co.uk) had a hit with its James-Bond-themed study of the ultimate driving machine. But as the story of Brutus Jeans indicates, a fabulous idea is no guarantee of commercial success. What the emerging Internet advertising industry requires is not just a few over-excited creatives, but the hard facts of media research and demographics. Such details are beginning to emerge.

Stephen Adshead, of Datamonitor, has recently completed a study of interactive advertising trends, which concludes that revenues will grow rapidly - reaching $13.1bn in western Europe in 2002. However, the balance between different sites will differentiate dramatically. The big gainers will be content aggregators, such as Yahoo, and search engines such as AltaVista. Advertising will supply 79 per cent of their revenue, $1.1bn, by 2002. However, content providers, such as shopping, games and education sites, will fare much less well, achieving only 9 per cent of the money they need by interactive advertising. And Internet service providers (ISP) will do even worse, barely making a useful supplement by selling online space.

"The big trend now is an increase in targeting," Adshead says. "Initially Web ads were generic, but they are now being linked to key words on search engines, for example, and it is this which is providing the kind of niche focus that advertisers like."

Indeed, a trip to AltaVista produced an ad for CBS Sportsline when the word "football" was typed in, and one for an ISP following "quantum physics". "Brutus Jeans" produced America's Recycling Day - which is 15 November, for those who need to know.

So differences are appearing between the Internet and traditional media. For example, printed advertising in magazines and newspapers substantially supports this industry, but it seems that ads attached to the Web versions of such publications will not be nearly so lucrative. The problem is that while the demographics of paper-based parents are well known, this information does not translate automatically to an online cousin. If, however, a publication can devise the means of providing descriptions of those viewing their Web content, attracting serious spending advertisers may become more feasible. Certain trade titles can do this already by virtue of the special interests of their audience, and others are trying to glean that knowledge through registration and questionnaires, though this is costly.

Yahoo is one company for whom the advertising future does look bright. And this is confirmed by Bill Gash, the UK sales director.

"Yahoo functions like a library," he explains, "with links listed in a hierarchical sequence. This means we can be quite specific about who is looking at a page lower down the chain, and so place certain ads there, or alternatively offer customers a more widely broadcast position on a home page. This method is more precise than simply attaching ads to key words."

Banner ads are the most commonly used type of advertisement being used, over 70 per cent at Yahoo, though Gash adds that promotions are proving attractive, too. A St Valentine's Day feature on the site was sponsored by Thomas Cook, for example, with a competition for a holiday in Paris. But banner ads are likely to remain attractive, especially when experimentation is common.

The advertising industry itself is beginning to throw up research to support the use of Internet. The Internet Advertising Bureau (IAB), a new body to promote the medium, has published the results of a study with big claims for banner ads, including the all-important positive impact on intent to purchase. "Advertisers who are overlooking the enormous brand- building power available on the Internet are missing a sure bet," comments Rich LeFurgy, chairman of IAB, in typical ad-speak.

So here begins the struggle to prove that advertising will work on the Internet - though with commentators routinely declaring that more than 95 per cent of advertising in traditional media does not, experimenters might do well to remember the lesson of Brutus Jeans.