The history of advertising & online communities
Created | Updated Jul 3, 2013
As the internet emerged, most online information was passed on a small scale via email or small discussion groups. These were the first online communities. The internet grew via a collection of communities harnassing a collection of technologies created by communities advancing the technology, and so on. Both the communities and the technology have benefitted from this virtuous circle of community spirit.
The internet, then known as ARPANET, was brought online in 1969 under a contract let by the Advanced Research Projects Agency (ARPA) which initially connected four major computers at universities in the southwestern US (UCLA, Stanford Research Institute, UCSB, and the University of Utah). Since the internet was initially funded by the government, it was limited to research, education, and government uses. Commercial uses were prohibited unless they directly served the goals of research and education. At this time, there wasn't any advertising online and there was little to no participation by major commercial interests.
The policy that limited internet use continued until the early 90's. At this point independent commercial networks began to grow. In 1992, the US online service provider, Delphi, was the first national commercial online service to offer internet access to its subscribers. Only three years later, all traffic relied on commercial networks and internet service providers. The leading providers of the late 90's were AOL, Prodigy, and CompuServe, making the internet accessible to both business and households. The first ISP (internet service provider) to offer unlimited internet access for a flat rate was EarthLink. They provided nationwide dial-up service to 98 US cities and emerged as one of the largest national ISPs by 1997 serving 320,000 customers.
Hotwired was the first commercial web magazine, launched on October 27, 1994. Although it was part of Wired Ventures, Hotwired was a separate entity from the familiar print magazine Wired. With the advent of the online magazine, online ads were not far behind. In That same year, the first banner ad on the internet appeared on Hotwired and it was an ad for AT&T.
By 1999, online communities such as Wikipedia and British based h2g2 began collecting the world's information through collaborative efforts. Interestingly, neither of these sites used allowed advertising. Despite these efforts, by 2003 advertisers and spammers become increasingly present throughout the internet. Any online community that took off began to attract the attention of someone wanting to sell to it. Traditional media channels lost their foothold. At the same time, digitized content became easily sharable leading to consumer’s media consumption habits changing dramatically. The internet also allowed users to interact with content and with each other in regards to this content, for the first time, in an immediate and public way. The ability to filter information based on preferences and receive relevant feedback helped to make marketing and advertising online an eery and personalised experience.
The internet is recognised as a great place to advertise on and also a place that supports social activity. In this way, the internet became "fundamentally different from previous media channels in that it supports communication" (Hopkinson, 2009). It also moved (and stil does) at a speed never seen before. To keep up with this speed, marketers had to adapt by engaging in real two-way dialogues with their customers.
Simultaneously, the internet developed alongside start-up companies. The business model of a start-up has allowed for innovation at a rapid pace and has conditioned consumers to expect their content at an even more rapid pace. Many of the silicon valley start-ups that have had major impact upon the web today were set up explicitly for user created content and collaboration, YouTube, Twitter, and Facebook to name a few. With these new tools available, user-generated content flooded the internet, provoking more and more online conversations.
In 2004, when Friendster was the largest of the social networking sites, with approximately 7 million subscribers, one of the first marketing campaigns to use the social media space occurred. The release of the DreamWorks film Anchorman was promoted on Friendster - a place for friends - with a banner advertisement. This in itself was not groundbreaking, however, they did not stop there. They also created a profile for the main character Ron Burgandy as well as several of the other characters from the film. This move was indicative of a larger cross-promotional, social marketing plan. Friendster spokeswoman Lisa Kopp said of this strategy as "a brand-new paradigm in media promotion" in an article that appeared on Wired.com ( 2004).
Established norms for online advertising developed relatively quickly, however there are much more complex formulas involved here than in radio or tv advertisements. Individuals can respond back and real dialogues can be developed. These dialogues are also publicly visible in most cases, so must be accurate and represent your brand in the best way, and they are happening constantly. This means that marketing within online communities is especially susceptible to transparent, recorded dialogues transpiring. There are two key elements to look at when marketing in this environment. The first is to recognise how contagious content is spread and to understand the science behind it and what it takes to start a movement. And the second element to understand is that this style of marketing has created a new kind of economy. It is neither a commercial nor a non-commercial economy anymore; it is a hybrid economy.
In addition to creating the space for social advertising, sites like Friendster and Myspace trained many individuals to experience the web in a customisable fashion. Publishing sites became more accessible and cheaper and it became easier for small businesses to enter the online arena. This created a proliferation of websites and online content. Now there are millions of sources of content on demand. This sea change brought with it the transformation of the media and advertising industries. In the appropriately (geeky) named article A Brief History of the Internet, authors Leiner et al. describes this shift as a time when "the internet is at once a world-wide broadcasting capability, a mechanism for information dissemination, and a medium for collaboration and interaction between individuals and their computers without regard for geographic location".
The value of these online communities was seen by major media companies wanting to exert their influence. In 2005, many bids were made for Myspace - the leading social network of the time - aiming to tap into these online spaces. Rupert Murdoch's News Corporation was successful in doing so and bought purch Myspace for $580 million. The purchase was seen as a way to capitalise on internet advertising, and drive traffic to other News Corporation properties.
By 2008, the power of social networks and communities became inescapable. Twitter grew, connecting communties across the globe. In 2009 Twitter was used by demonstrators to organise against Moldovan parliamentary election that they claimed to be fraudulent. Facebook was overcoming Myspace in popularity and in an effort to monetise, it took to selling advertisements. By September 2009, Facebook stated that it had turned cash flow positive for the first time. In 2012 Facebook hit the milestone of having more than one billion people using it every month.
Hopkinson, R., 2009. A Brief History of Digital Media. threeminds [ONLINE] Available: http://threeminds.organic.com/2009/10/a_brief_history_of_digital.html. [Last accessed 15 June 2012].
Leiner et al. (n.d.) Brief History of the Internet [Online]. Available from: http://www.internetsociety.org/internet/internet-51/history-internet/brief-history-internetpacific/120815/new-zealand-cyber-bullying-bully-bullies-bullying-facebook [Accessed: 8 October 2012]
IMAGE: http://flowingdata.com/2010/10/06/fictional-map-of-online-communities/
