McCann chief predicts boom in Web revenue

By the year 2000, Web-based advertising will be worth between $US3 billion and $US5 billion, says McCann-Erickson worldwide executive vice-president Ira Carlin. "That's bigger than US radio is now,' he says. 'This is just the beginning of a major new industry".

By the year 2000, Web-based advertising will be worth between $US3 billion and $US5 billion, says McCann-Erickson worldwide executive vice-president Ira Carlin.

“That’s bigger than US radio is now. This is just the beginning of a major new industry”.

Carlin has been in the business since 1970. He began life as a physicist, then became a clinical psychologist. “It seemed a quite natural thing after that to go to advertising,” he says, tongue in cheek.

He has certainly had a long association with technology and advertising. A member of CompuServe since 1979, he assisted in the 1981-83 videotext experiments involving the Times-Mirror in the US and Bildschermtex in Germany. During the mid-1980s, he led a McCann team that sought to utilise the first laptop computers (Radio Shack 100s) as platforms for the first agency worldwide email system, Adlink. In 1988, he was instrumental in the establishment of the McCann MIT Media Lab relationship.

In 1991, he led a McCann team testing interactive programs and commercial messages, which involved AT&T, General Motors, Coca-Cola, ABC, NBC and ACTV.

Tracking Web developments is a natural evolution.

The Internet comprises two different things: products and a distribution system, he says.

“Developments on both sides are not surprising if you look at the history of media. The path is similar to the typical development paths of all new media this century.

“For example, product development is undergoing exactly the same metamorphosis as television did in the 40s and 50s.”

The Web, he says, was barely a newspaper three years ago. “It’s quickly moved into the magazine field, then into radio [as in audio] and is moving to TV.

“Ultimately, that’s where I think we will get video-on-demand from. It’s being driven by push technology.”

Carlin has had various iterations of streaming video on his PC and he expects TV quality video to be available later this year.

“The next thing will be the further development of PC-TV. There are a billion TVs in the world and they only way the manufacturers can get them turned over is with new technology.”

That, he says, means the adoption of digital standards and the incorporation of PC chip sets so they become infinitely scalable.

“I was in Japan two weeks ago and saw 13in and 15in TVs that were as thick as my forefinger. They’re very expensive now, but within three to five years you’ll end up with these lightweight screens which you can put anywhere in the house.”

From the digital perspective, he says he has seen TVs at MIT’s Media Lab which range from 525 lines (the US NTSC standard) to 3000 lines.

“In the future, content will be media-independent. You may access the same information via a newspaper, by audio or by television.”

So where will advertisers make their money?

Carlin says a recent US survey (Jupiter) estimates 1996 Web advertising at $US325 million. “But more than half that is one search engine advertising on another search engine’s page.

“However, I think we will see an explosion of advertising. The driver will be business to business, providing information about reports and products. Consumer advertising will grow but only as the Internet market grows.”

McCann is a profitable player in Web advertising. The company (the world’s largest) has annual revenues of $US1.1 billion, based on $US9.3 billion in billings. It has 300 people doing nothing but Web-based work and is currently generating $20 million annually in revenue from that source.

Carlin is as aware as anybody of the need for bandwidth requirements of the Web to grow. But he’s betting satellite delivery of video will be the way of the future. “That’s because most of the cable companies don’t have the capital to to upgrade for two-way digital.

“Also, after the IRS, in the US they’re the most hated organisations because they’ve been raping and pillaging for 20 years.

“Given the option of 200 crystal-clear channels via satellite, plus a high-power Internet connection, you can bet the ranch that people will move to it.”

He warns, though, not to underestimate the power of AT&T. “It can now pump 60Mbit/s through twisted pair using ADSL. AT&T is also beginning to realise that its role is not to be the content provider.”

So when will all this happen? Carlin says it’s all “a lock” by 2005.

“Seventy-five per cent will happen by the year 2000 — barring a recession or Bill Gates closing all his IOUs.”

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