Ad:Tech Conference Gets Its Groove Back

By: Catharine P. Taylor and Michelle Jeffers One of the hottest online advertising conferences during the dot-com boom, @d:tech, may finally have gotten its groove back. The evidence was partly in the solid attendance of 3,000 for last week's event, held at the Palace Hotel in San Francisco, double the 1,500 who turned out last spring in Los Angeles.

"We're back at 2000 levels," said @d:tech chair Susan Bratton. "A lot of people are coming back into this marketplace, and there is a whole new group of people who are here to understand best practices in this advertising space."

While conference seminars focused on the logistics of interactive marketing, the primary topic of conversation was the vibrancy of the event itself. "It's heartening to see this kind of turnout," said Joseph Jaffe, a consultant for online players including Microsoft's MSN and iMedia.com. Exhibitors were up too, from 60 booths last spring to 95, featuring usual suspects such as ad technology provider Viewpoint and startups such as blowsearch.com.

The buzz level was even in marked contrast to @d:tech's annual East Coast event, held last November in New York, where the mood was far more subdued. Last week's mood caused more than one observer to crack that @d:tech attendees were, yes, partying like it was 1999.

At the same time, economic indicators are showing signs of a rebound in online advertising. Internet ad spending totaled $1.6 billion in last year's fourth quarter, up 9% from the third quarter, according to a report by the Interactive Advertising Bureau and PricewaterhouseCoopers. PwC is projecting that online ad spending will be up 6.5% this year, reversing the nearly 8% decline of 2002. During the peak year of 2000, online ad spending totaled $8 billion.

Several advertisers at @d:tech spoke of online budget increases. Mary Wilhelm, Internet marketing manager of Adidas, said that the athletic shoe marketer recently boosted its online budget by 40%.

But the industry has plenty of rebounding still to do. While the second half of '02 was positive, full-year spending was still down 16% to $6 billion. And despite the increasing amounts of time consumers are spending online, the category ranks seventh in spending out of nine forms of media, according to data from PwC and Interpublic Group's McCann-Erickson Worldwide.

Much of the this year's projected rebound is being fueled by ads on Internet search sites such as Google and Overture. According to IAB/PwC, keyword-search advertising accounted for 15% of online ad revenue last year, almost a fourfold increase from '01.

An @d:tech panel discussion about search innovation that featured Omid Kordestani from Google, Jeff Weiner of Yahoo! and Overture's Bill Demas attracted an overflow crowd of about 400. Demas, an Overture senior vice president, said search engine advertising is about a $1 billion market that will grow to $7 billion-$8 billion in the next four years.