Academic journal article The McKinsey Quarterly

Interactive Advertising: When Will the Revolution Come?

Academic journal article The McKinsey Quarterly

Interactive Advertising: When Will the Revolution Come?

Article excerpt

Will interactive media succeed in capturing advertisers' interest? Research suggests the answer is "not yet." A new survey of advertising agency media executives reveals that current spending on and experience with interactive advertising are much less extensive than the hype around this fashionable topic would suggest.

Notwithstanding the subscription revenues of current consumer online services, the pot of gold expected to drive industry development is advertising. Capturing a mere 2 percent of 1994 measured media spending in the United Slates would translate to $2.8 billion, or more than four times the 1994 revenues of all consumer online services combined.

Limited spending

In 1994, only $135 million was spent on advertising on interactive media, most of it on online services and CD-ROMs. This poor showing occurred in spite of significant trial by advertising agencies [ILLUSTRATION FOR EXHIBIT A OMITTED] which exhibited strong awareness of interactive media and believed them relevant to the goods and services they marketed. The low level of spending also belies the perceived superiority in targeting and building relationships with attractive audiences that these new vehicles have over more traditional media.

Mixed experiences

One reason for this low level of spending is that actual experience with interactive media has been poor. …

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