DoubleClick CEO: Web Ad Industry Is Evolving

NEW YORK — Against a backdrop of the industry’s continued woes, DoubleClick chief executive Kevin Ryan mostly avoided discussion of the problems affecting Web advertising in his keynote address at this year’s @d:Tech conference, and instead recounted how far the space has come.

“During the last two years, people have had trouble separating out stock price from … what’s underlying,” he said. “More people are coming online every day. More people are shopping online every day. And more people are being influenced.”

“In 1995 and 1996, I saw that it would be a colossal industry, but most people didn’t get it. And I thought ‘that’s fantastic.’ [Today,] I feel it’s an opportunity to build marketshare … to carry us through the next five years. It’s going to be so much more significant in the next five to 10 years.”

Ryan pointed to the development of television, suggesting that concerns during the 1930s about the emerging medium’s viability mirrored those facing Web advertising. Comparing it to the way that television eventually evolved to be the dominant branding medium, Ryan described Web advertising evolving from the banner ad to more compelling rich media ads, like “takeover” units.

But Ryan added that Web advertising wasn’t just mirroring television’s development — it’s surpassing it. For instance, he said 100 million users clicked on DoubleClick ads during the past week.

“There is no other media that can say I delivered 100 million users to an advertisers — that’s one-third of the online population,” he said.

Ryan also cited email as an underappreciated center of growth, with “much more significant an impact than anyone believes.”

“It’s not so much in the form of pure ads — it’s mostly contact with existing customers,” he said. “But spending is colossal … because it’s working.”

Still, he said email marketing also is going through a transitional phase — one that requires the industry to come to terms with growing pains, like spam.

“It’s evil and something that sets back the industry,” he said. “With all the junk out there, spam decreases your willingness to open something that works.”

Additionally, Ryan said marketers are slow to realize email’s effectiveness as a replacement for direct mail — and thus, are rarely pushing the medium’s envelope.

“For the vast majority of [advertisers], it’s still baby steps,” he said. “For [offline] catalogs, there can be a hundred different mailings, a hundred different drops … so email is clearly still at an early stage.”

However, Ryan said overall that things aren’t as bad as they seem.

“People would love to have the problems we do,” he said, pointing to declines in television usage since the advent of the Internet. “People love our product, and we’re undercharging them.”

Indeed, Ryan singled out only a handful of factors hindering the space’s growth, with the difficulty and cost of implementing Web buys being one of the few.

“The time it takes is setting the industry back,” he said. “If you want to buy … say, time on Friends, it’s like a 20-minute conversation. Online, you go to one Web site and there are a hundred different configurations. It’s going to be simplified by technology, through changes in process, and through standards … but the fundamentals are there.”