AFI BLOG: Media and Technology

The Wall Street Journal

Social, Video Sites Duck Some Old-Style Pitches And Go for Interactivity

As concerns mount that the slowing economy may hurt the online-ad market, Silicon Valley Web start-ups are developing new approaches. Companies such as online-software venture Slide and video and social-networking site Bebo are trying to run ads that appeal to a younger audience — one that often turns up its nose at old-fashioned online ads, such as traditional “banners” trying to promote brands.

When a user clicks on a small version of this ad on Meebo, it expands and plays a snippet from the television show “Dexter”. That footage also can be shared with friends.
Worries about a slowdown in Internet ad growth have added urgency to the push for advertising models that can reach this audience more effectively. Consumers are flocking to social-networking sites like Facebook and Meebo, but many still aren’t clicking on the ads that such companies are banking on to generate revenue. Start-ups that have raised cash from venture capitalists but haven’t produced much revenue yet — let alone profit — are hurrying to develop ads that are more interactive.

Some efforts show early signs of working. Slide, which sells programs that people can use to decorate their pages on sites such as Facebook, has launched campaigns with advertisers including Energy Brands’ Glaceau Vitaminwater and Estée Lauder.

One campaign lets Slide users send virtual representations of different-flavored bottles of Vitaminwater to friends online through an application called “Top Friends.” In eight days, Slide says, users sent 10 million “bottles” of Vitaminwater.

Meebo, which offers instant messaging and chat rooms, announced last week that it had raised $25 million in financing. To generate more revenue, the company will start selling ads this quarter that users can forward to friends or even shut off, unlike traditional ads that stay on the computer screen. Some spots may contain movie trailers or computer games, which can be enlarged on screen and shared with friends.

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