History
The pioneer of online advertising was Prodigy, a company owned by IBM and Sears at the time. Prodigy used online advertising first to promote Sears products in the 1980s, and then other advertisers, including AOL, one of Prodigy's direct competitors. Prodigy was unable to capitalize on any of its first mover advantage in online advertising.
The first clickable web ad (which later came to be known by the term "banner ad") was sold by Global Network Navigator (GNN) in 1993 to Heller, Ehrman, White and McAuliffe, a now defunct law firm with a Silicon Valley office. GNN was the first commercially supported web publication and one of the very first commercial web sites ever.
HotWired was the first web site to sell banner ads in large quantities to a wide range of major corporate advertisers. Andrew Anker was HotWired's first CEO. Rick Boyce, a former media buyer with San Francisco advertising agency Hal Riney & Partners, spearheaded the sales effort for the company. HotWired coined the term "banner ad" and was the first company to provide click through rate reports to its customers. The first web banner sold by HotWired was paid for by AT&T Corp. and was put online on October 27, 1994. Another source also credits Hotwired and October 1994, but has Coors' "Zima" campaign as the first web banner.
In May 1994, Ken McCarthy mentored Boyce in his transition from traditional to online advertising and first introduced the concept of a clickable/trackable ad. He stated that he believed that only a direct response model—in which the return on investment of individual ads was measured—would prove sustainable over the long run for online advertising. In spite of this prediction, banner ads were valued and sold based on the number of impressions they generated.
The first central ad server was released in July 1995 by Focalink Communications, which enabled the management, targeting, and tracking of online ads. A local ad server quickly followed from NetGravity in January 1996. The technology innovation of the ad server, together with the sale of online ads on an impression basis, fueled a dramatic rise in the proliferation of web advertising and provided the economic foundation for the web industry from the period of 1994 to 2000.
The new online advertising model that emerged in the early years of the 21st century, introduced by GoTo.com (later Overture, then Yahoo! and mass marketed by Google's AdWords program), relies heavily on tracking ad response rather than impressions.
Read more about this topic: Web Banner
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