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Web Marketers Still Finding Lay of the Land

NEW YORK -- You've come a long way, baby. But there's still a long way yet to go.

That was the sentiment here today at the ad:tech New York 2007 conference, where online advertising insiders struck a tone of optimism that landed somewhere between cautious and exuberant. At the same time, speakers agreed that Web ads are beginning to live up to their promise of redefining the advertiser-consumer relationship -- even if they're not sure exactly what the new definition will be.

Randall Rothenberg, president and CEO of the Interactive Advertising Bureau (IAB), trumpeted the online ad space's strong and growing condition during the opening "State of the Industry" keynote panel. He cited an IAB/Pricewaterhouse Coopers study that projected online ad spending may reach nearly $20 billion this year.

Yet Rothenberg also warned of the "specter of regulation," referring to the possibility that the FTC could restrict the collection and usage of cookies.

"They're trying to regulate you right out of business," he cautioned, advising the audience to "watch Washington, watch the state capitals, [and] watch what's going on around you."

The panelists at that opening session, representing advertisers, agencies and media outlets, agreed that such concerns make it critical for the industry to ensure that consumers understand the distinction between cookies and spyware.

Despite the scrutiny over cookie policies, panelists said ensuring their survival will help address the biggest complaint facing online marketers: a lack of ad relevance. Without the tracking information being provided by cookies, they said, it's far more difficult to deliver ads that may actually be useful to consumers.

"Why, if I'm married, am I still seeing ads for singles?" said Michael Barrett, executive vice president and chief revenue officer at Fox Interactive Media. "Cookies are anonymous ways to give insight into [people's] preferences."

However, he added that it is critical for online media companies to offer an opt-out mechanism to ensure consumers' trust.

Retaining consumer trust, other industry figures added, is key in the competition for eyeballs as users grow ever more media-savvy. Increasingly, panelists said, victory will go to marketers who shed the stigma of traditional offline ad models, replacing them with commercial content that consumers feel comfortable enjoying, embracing and sharing with friends.

That's become the chief model advertisers now use to take advantage of user-generated content sites like YouTube and social networking sites like Facebook and MySpace -- what panelists dubbed the "participatory Web."

These emerging content plays, panelists said, afford advertisers the opportunity to insert themselves into conversations among friends, recruiting consumers to re-transmit their messages in the process.

Consequently, how best to monetize the booming social networking space has emerged as a white-hot question, as evidenced by the much-hyped buildup to yesterday's unveiling of Facebook's new advertising platform.

No other session at ad:tech more dramatically illustrated the benefits of recruiting consumers as marketing partners than the afternoon panel titled, "Social Media and Consumer Generated Content: Has a Value Proposition Emerged?" During that session, speakers from YouTube, Fox Interactive Media, Coca-Cola and interactive agency Digitas took turns highlighting the burgeoning success of campaigns that tapped into user-generated content and content-sharing on social networks.

Heinz's "Top This" YouTube campaign proved a striking example of recruiting in the participatory Web, where some 8,000 users submitted self-made videos featuring Heinz ketchup. Of those, almost 4,000 were of sufficient production quality to make it to the Web.