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To: PartyTime who wrote (9524)	6/24/1998 3:06:00 PM
From: PartyTime	Respond to of 18444

This is rather old, but it does describe the ways of Doubleclick: INTER@CTIVE WEEK September 8, 1997 DoubleClick Brings Darwin To Web By Steven Vonder Haar The ad business has always been a jungle. Now, the notion of the "survival of the fittest" may play a major role in determining how the advertising industry evolves on the Web. At least that's the way Kevin O'Connor sees it. O'Connor is president of DoubleClick Inc. -- an ad sales network that this month will take center stage in an increasingly heated debate over the best way to sell advertising on the Web. "It's just like the theories of Charles Darwin," O'Connor says of the evolution of Web advertising. "Life either adapts to its environment and thrives, or it doesn't and dies out." The network (www.doubleclick.net) this month is putting the theories of Darwin to the test as it takes the wraps off its DoubleClick Direct offering -- a service that is making O'Connor the poster boy for direct marketing on the Web. To some in Web advertising, O'Connor may look more like Public Enemy No. 1. DoubleClick Direct aims to post direct marketing pitches on otherwise unsold advertising space, paying publishers only if the ad generates a customer response or a sale. Such an approach threatens to upset the apple cart in the nascent field of Web advertising, where most high-profile publishers prefer the guaranteed payments that come from charging set fees for delivering an advertising message to an audience selected by the marketer. "The cost per revenue model hands all the upside benefit to the advertiser and cuts the control that publishers have over their own business," says Neil Monnens, president of WebRep Inc. (www.webrep.net), an agency that sells space on behalf of Web sites. "Instead of being paid for delivering an audience, publishers' revenues become dependent on how skilled an advertiser is at closing a sale." On the surface, DoubleClick Direct appears to play the role of a giant ad sponge, soaking up unused ad inventory with a system that lets publishers generate incremental revenue if they succeed in connecting direct marketers with consumers. But swirling underneath are factors that may foster a new trend that raises the bar of competition in the Web advertising business, making online marketers and publishers more dependent than ever on sophisticated data analysis techniques. The heart and soul of DoubleClick Direct is not the way it puts unsold inventory to work. It's the way the service uses database technology to match direct marketing pitches with the sites where they will be most effective. Using an internally developed system -- aptly dubbed Darwin -- DoubleClick Direct can evaluate on a real-time basis a variety of factors and calculate how much money a publisher can expect to receive from running a specific direct marketing ad. The formula takes into consideration the percentage of users at a site who have clicked on an ad historically, the advertiser's past success at converting a prospective customer into a buyer and the percentage of commissions shared with the Web site. The Darwin system essentially aims to create an environment in which direct marketing ads that offer lucrative returns for publishers will survive and thrive by gaining added exposure on Web sites, while those that perform poorly will be forced to adapt. Marketers, for instance, may opt to share a larger part of their commissions with Web sites in an effort to boost the return a Web site can expect from running an ad. "We're trying to create an efficient market here, like a Nasdaq for Web advertising," O'Connor says. "This system forces direct marketers to create great offers and compels them to share money with Web sites. If they don't, they'll get bumped out by somebody else who will." And even though many in the industry would like nothing better than to see the direct marketing model disappear, it appears to be here to stay. While DoubleClick Direct has commitments from publishers allocating 80 million page views monthly to the service, ad management tool vendors also have started lining up to address the direct marketing issue. For instance, NetGravity Inc. (www.netgravity.com) this month plans to announce a joint venture with Aptex Inc. to develop a direct marketing targeting tool that can be used by individual sites. The product likely will be released in the first quarter of 1998, says Rick Jackson, NetGravity's vice president of marketing. "The market is driving the need for targeting and more detailed information," Jackson says.