Tracing the History of Online Advertising

Table of Contents

• A Brief Look at the History of Internet Advertising 
• Key Takeaways 
• Conclusion 
• FAQs

Imagining a life without the internet is almost impossible nowadays. And imagining the internet without online advertising is also equally difficult. Online advertising has empowered scores of website publishers to shift their businesses completely online and earn a significant amount of money in the process. Advertisements have allowed people to become YouTubers, columnists, bloggers, content creators, etc., who make great money while creating communities around their brands.

In fact, Statista’s research shows that the global digital advertising budget amounted to $378.16 billion in 2020. Such is the reach and demand of online ads. This development begs the question, “When did online advertising start to become a part of all our lives?”

In this blog, we trace the history of online advertising and look at the key moments that propelled it to become such a powerful tool. 

A Brief Look at the History of Internet Advertising

Knowing about the past offers perspectives for the future. So let’s head straight to the next section, which talks about a brief history of online advertising. 

1. 1978: the first spam email is sent

Spam has existed since time immemorial. It has become a buzzword with the prevalence of the internet, now that even our mailboxes have a “Spam” tab. But did you know that spam was rampant even when the internet had just started getting its first consumers? 

The first email in the history of the internet was sent on May 3, 1978. Gary Thuerk, a marketer at Digital Equipment Corp, sent a bulk commercial email to 393, customers notifying them about a new computer model that was available. Here’s what the email looked like. 

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This email caused the systems of many customers to crash, and a notice was issued against Gary and his company. 

2. 1994: the birth of banner ads

Experts like to believe that ads have derived from spam emails and spam calls, which, in a way, were the first form of consumer advertising to existing. But even an amateur can clearly tell that spam is not something consumers enjoy. It is invasive, annoying, and violates privacy more often than not. 

But we can safely assume that web publishers were relentless when it came to finding a business model on the internet through which they could earn. In 1994, the online magazine HotWired displayed the first-ever banner ad on the internet. It was a small rectangular space on HotWired’s web page, purchased by AT&T. About 44% of people who viewed it clicked on it. Here’s how it looked.

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3. 1996: DoubleClick strengthens the internet advertising network

The next significant milestone in the history of online advertising was the launch of DoubleClick in 1996, the first company ever to commercialize online advertising. Before the company’s launch, there was no way to track publishers and advertisers. DoubleClick helped streamline this process by allowing interested parties to track how their ads were performing and whether these ads were worth the investment. 

This led to a surge in content websites that relied on banner ads to make some money. In essence, we can say that DoubleClick was the first broker of online ads. But as the old saying goes, good times don’t last. Banner ads (despite still being alive) have witnessed a painful decline. Users now willingly tune them out, a concept which is termed banner blindness. 

4. 1997: Prodigy and its banner advertising model

There was a time when the internet was a luxury when IT firms and web publishers were just experimenting with it. Back then, Prodigy was one of the companies that started a premium service for people to consume news, weather information, bulletin boards, etc. This was a remarkable achievement, as people had never known something like this could exist. In 1997, the company charged a fee of about $13 per month to offer this service. What was the highlight of this service? An ad. At the end of every web page, there was a single banner ad. 

However, despite its great business model, the service shut down and became just another name in the brief history of online advertising. The company could not survive the internet traffic they never believed they would get. 

After the dot-com breakout in the late 1990s, many companies started looking for alternatives to banner advertising, as it wasn’t fetching them the revenue they wanted. This is when pop-ups took birth and started becoming popular. 

The first pop-up is known to have been created by Ethan Zuckerman in 1997. Pop-ups helped in gaining user attention because of their constant state of motion. They were better than banner ads, as they were hard to ignore. However, users were quick to point out their annoyance with pop-ups, which led to the birth of pop-unders. 

For a while, when JavaScript was being developed and internet inventions were booming, pop-ups and pop-unders made companies a lot of money. But soon, blockers were developed for them as well. 

5. 1998: Google is launched

With its launch, Google changed the face of advertising forever. With the number of websites increasing exponentially, there was never a better time for a search engine to come into the picture. Google played a significant role in bridging the gap between advertisers and publisher websites, as well as consumers of the ads. It made tapping into an audience easier. 

Although it personalized its search results only later on—and the search engine is becoming more and more sophisticated by the day—this year is an unforgettable one in the history of internet advertising.

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6. 2000: Google AdWords enters the scene

Once Google started dominating the search engine sphere on the internet, it started looking for a lucrative way to earn money. This was accomplished through textual ads that were more relevant and targeted to users, as opposed to banner ads, which were not as effective. 

Not only did Google make a lot of money through ads, but it also launched Google AdWords, a pay-per-click (PPC) platform, wherein advertisers could publish their ads on publisher websites, and everyone made money in the process. 

7. 2003: the age of social media advertising

LinkedIn was launched in 2003, whereas Meta (then, Facebook) ran its first-ever ad project in 2004. Advertisers were still continuing with Google’s PPC model, and publishers and advertisers were making a significant amount of money in the process. Pop-ups continued to rule, except the content and presentation of the ads changed. For example, video pop-unders were created eventually. 

One such form of advertising is through social media, which is definitely ruling the internet. Every other Internet user is a consumer of multiple social media platforms, which allow brands to advertise in different formats. 

On social media, people can promote their brands as stories, in-feed ads, video ads, etc. Social media influencers also take direct partnerships for ads from well-known brands and are able to earn hefty amounts in the process. 

Key Takeaways

• Online advertising has empowered several website publishers to shift their businesses completely online and earn a significant amount of money in the process.
• The first email in the history of online advertising was sent on May 3, 1978. Gary Thuerk, a marketer at Digital Equipment Corp, sent a bulk commercial email to 393 customers notifying them about a new computer model that was available.
• In 1994, online magazine HotWired displayed the first-ever banner ad on the internet.
• In 1996, DoubleClick helped streamline the online advertising process by allowing interested parties to track how their ads were performing and whether these ads were worth the investment or not. 

Conclusion

Advertising is an ever-changing concept because people are volatile, dynamic, and fickle. Online advertising has evolved, because people caused it to change, according to what they required. The history of online advertising is marked by many people’s impact on digital trends. 

But despite all its issues, the world of online advertising still stands and continues to help web publishers and advertisers limitlessly. Today, many small publishers are able to make money from their websites, and many small-business owners are able to reach a wide audience through ads. Such is the power of online advertising.

FAQs