Display Advertising: Newspaper to Interactive- A Theoretical Framework

Advertising in its native form was printed ads for promotion of services and products in the early Eighteenth century. These ads appeared first in standalone pamphlets, then moving on to newspapers and magazines. As technology advanced, display advertising changed its form from colored printed text to graphics and printed pictures. The underlying theories of innovation led to these changes over time. By tracking the need and adoption for displacement of display advertising over time, we can understand and fairly predict the future of display advertising.

Therefore, the three most important developments in the evolution of display advertising were

  • Newspaper Advertising

Prior to the evolution of the printing press, businesses could only promote their products within a short distance of their existence. This made it extremely difficult for consumers to find a product that was not available in their cities or towns and thus even though technological advances were evident in this period, their adoption was slow and difficult. Over time, as the printing technology got widely accepted, the evolution of mass media resulted in massive growth in newspaper circulation in the early 18th century. Seeing it as an opportunity to reach several people in far off places at one time, companies started promoting their services and products. Thus there was a Supervening Social Necessity (Winston, 1998) for quick information about the availability of products and services as well as information about technological advancements. Also, since advertising was a good source of secondary income for most publishers it seemed like a good use of their print space. Thus these social need let to the quick adoption of advertising in the print medium for both advertisers and consumers.

Key Developments in this era: (Adage, 1999)

  • 1704 – The first newspaper advertisement, an announcement seeking a buyer for an Oyster Bay, Long Island, estate, is published in the Boston News-Letter.
  • 1882 – Procter & Gamble Co. begins advertising Ivory soap with an unprecedented budget of $11,000.
  • 1887 – The American Newspaper Publishers Association is formed.
  • 1893 – Frank Munsey drops the price of Munsey’s Magazine to 10 cents and the cost of subscriptions to $1, marking the first attempt at keeping a magazine afloat by advertising revenue rather than newsstand sales.
  • 1929 – American Tobacco Co. spends $12.3 million to advertise Lucky Strikes; the most any company has ever spent on single-product advertising.
  • 1938 – Radio surpasses magazines as a source of advertising revenue
  • 1956 – Videotape recording makes prerecorded commercials possible.
  • Rise of the Internet – Online Advertisements

By early 1993, Internet had become a hard reality with over 5 million users. As Internet users increased, users started expecting more and more required information online. Google and AOL launched their search engines, which made it easy for users to find information online. These search engines showed textual display ads based on keywords searched. The advertisers bid for a keyword and based on the highest bid and the frequency of search, the advertisement cost was decided. As Internet got widely adopted, the incumbent advertising agencies started poring more money in traditional advertising. Winston named this phenomenon, the Law of Suppression of Radical Potential. Since online advertising was easy to adopt, had wide consumer base and was far cheaper than traditional mediums, new media agencies emerged who helped businesses target their marketing dollars in the online media. However, traditional agencies tried to suppress this trend by increasing spend on traditional media. By the early 2000s Internet usage was so high that their began a decline in the use of traditional media and new interactive ways to advertise via video ads and mobile ads emerged.

 

  • High Adoption of Internet Applications- Interactive Advertisements

By the early 2000s, the adoption of online social media and the viewership of online video and User Generated Content were on the rise. Thus, it was apparent that the current search ads were not enough to target consumers. From the perspective of Christiansen’s theory of innovation, interactive advertisement was a Sustaining Innovation. Interactive advertising aimed at engaging the user, by clicking on an ad and completing an action on the destination web page. It however did not deplete advertising dollars from search advertising, but rather from traditional medium of advertising like Television and Print advertising. Thus, on one hand for the previously adopted online search ads it acted as a Sustaining Innovation, however on the other hand for traditional medium of advertising, online interactive advertising was a New Market Disruptive Innovation.

 

Changes In the Timeline:

 

As display advertising got adopted widely, it was evident that the changes in society due to adoption of other technologies, was the driving factor for change in the mediums of advertising. Newspaper advertising was adopted due to the societal need of information. Online advertising was adopted because of the consumers need to find information and products faster and more easily. Finally, I believe that interactive advertising was adopted widely, because there was a use for instant access to social interactions, video and audio content and thus this need was gratified by use of the Internet mediums. Thus, I think that societal changes led to the adoption of various forms of advertising over time.

References:

  • Anthony, S., Christensen, C., & Roth, E. (2004). Seeing What’s Next: Using the Theories of Innovation to Predict Industry Change. Boston, MA: Harvard Business School Press.
  • Sivulka J. (2011) Soap, Sex, and Cigarettes: A Cultural History of American Advertising, Boston MA: Wadsworth Cengage Learning.
Advertisements

2 Comments

Filed under COM546

2 responses to “Display Advertising: Newspaper to Interactive- A Theoretical Framework

  1. Hi, Navni — nice positioning of online ads as sustaining innovation. 🙂

  2. Pingback: Project Methodologies « COM546 : Evolutions

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s