Ad:tech Crowds Highlight Interactive Industry's Resurgence

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SAN FRANCISCO -- Ad:tech last week concluded the biggest event in its 10-year history, signaling a renewed confidence in the interactive marketing, media and technology markets.

The organizer claims ad:tech San Francisco attracted more than 9,000 pre-registered attendees -- up 50 percent from last year -- and 300-plus exhibitors. There were more than 200 speakers in 55 sessions covering search, e-mail, TV 2.0, personas, RSS, multicultural marketing, trends and technology.

"It's the biggest, deepest, widest show that ad:tech has ever done," said Susan Bratton, longtime ad:tech chair and Cendara CEO.

Even the number of marketers attending the show was up, she said, though she didn't provide supporting data. Those walking the floor at San Francisco's Moscone Center North wouldn't have missed the crowds in the aisles, the din and the air of optimism. Perhaps they knew the Force was with them.

"We think we're entering the golden age of the Internet," Sequoia Capital venture partner Mark Kvamme told a packed hall of executives in his keynote session.

Internet Needs More Ad Dollars

It's fair to hang onto Mr. Kvamme's words. Despite the many duds his company invested in during the dot-com heyday, it made some sharp bets on Google, Yahoo, PayPal, MP3 and YouTube. All told, Sequoia-invested firms account for one-tenth of Nasdaq's capitalization.

As expected, many sessions and talks were evangelistic in nature. Popular as interactive marketing is, technology and service providers knew they had to continue selling to yank more budgets their way from traditional media.

Mr. Kvamme was not alone in his feeling that the Internet deserves more credit in marketers' media and marketing plans. TV accounts for 33 percent of U.S. media consumption, yet the medium gets 38 percent of all marketing budgets, he reminded the audience. By contrast, 32 percent of media consumption by U.S. consumers is online, but the medium gets only 5 percent of ad dollars.

"It tells me we've seen nothing yet," Mr. Kvamme said, adding that "advertisers need to go where consumers are spending time, and consumers are spending time on the Internet."

Yahoo, for example, has about five times the daily audience of all TV networks combined, he said. And advertisers notice. Yahoo Video, Mr. Kvamme said, sold out its inventory for the next three months.

The Interactive Advertising Bureau predicts marketers by 2008 will spend $18 billion on interactive advertising. Mr. Kvamme thinks the number likely will be $30 billion to $35 billion, or half of all network TV spend.

E-commerce is another area of opportunity. According to Department of Commerce data, 2.2 percent of all U.S. retail sales are online. It's 30 percent in South Korea, due mainly to tremendous broadband penetration and pipeline width in that country.

Mr. Kvamme speculated that if only 20 percent of retail migrated online, that would amount to $1.2 trillion in e-commerce transactions. He thinks an 8 percent to 9 percent migration to online retail is possible.

"We're very aggressively looking at e-commerce companies," Mr. Kvamme said, referring to Sequoia's investment agenda. "We're talking about a lot of money. That's why we think of this as a golden age."

Market Is Bullish

Exhibitors like Findology, a provider of customized online marketing technology, are aware of the market's bullish mood. The Los Angeles company bought the highest-level platinum sponsorship of ad:tech. One perk: prime placement right in front of the show floor entrance.

"I definitely think this is the best West Coast ad:tech since the beginning, [especially] having it at the Moscone Center," Findology CEO Jon Waterman said April 26. "Seems there's a lot more business getting done, lots more diversification within the industry -- new technologies, new companies."

What was top of mind for inquirers at Findology's booth?

"Fraud is still a hot topic," Mr. Waterman said. "And we're getting a lot of positive feedback at our booth because of the launch of Fraud ID, which is our standalone application that advertisers and agencies can use across all pay-per-click vendors."

Ad:tech typically attracts client-side executives from sectors like consumer packaged goods, retail, entertainment and media. Though Fortune 1000 companies are represented, executives from small businesses like wholesale supplier Bamboo & More show up, too.

Lynn Carol Breger runs Bamboo & More out of Mill Valley, CA. She is looking to redesign her Web site to generate more qualified leads as she expands to selling cork flooring via www.bambooandmoreonline.com. Ad:tech San Francisco helped raise awareness of the solutions available.

"It's explained to me the whole range of other search engine opportunities and just to see what's going on in the industry," Ms. Breger said. "Everyone lives in their own niche."

Congenial Atmosphere

This ad:tech drew 1,000 more people than ad:tech New York in the fall. The increased numbers didn't dim the charm for Scott Wolf, CEO of newsletter and book publisher Arcamax Publishing, Newport News, VA.

This was Mr. Wolf's first ad:tech San Francisco, though he has attended the New York show in the past couple years. He preferred this show, whose theme is, "Connecting globally: markets in motion."

"I think to me it seems a much more comfortable atmosphere to some because of the whole layout of the booths and the whole exhibit floor," Mr. Wolf said. "In New York it's almost claustrophobic on the floors. I just find people are in a better frame of mind to do business.

"It's been very productive to me," he said. "You can talk to someone without being jostled. The noise level in New York -- it's hard to talk. The floor's better here. It's more like a trade show. It's less of a frat party kind of feeling."

But there is no doubt ad:tech is also evolving into a gathering of alumni who have stuck with interactive marketing, media and technology since the mid-1990s and since the show's inception in New Orleans in 1996.

Take Sarah Fay, ad:tech adviser and president of agency holding firm Isobar U.S. She flies in to an ad:tech show to speak on a panel, sometimes to introduce speakers or simply to mingle with friends and peers.

"It's kind of like a college campus -- every few steps you run into another friend," Ms. Fay said. "The thing that's interesting to me is that there are 9,000 here. But there are a core group of just a few hundred that have been in it since the beginning, and I kind of feel like they're the core of the industry."

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