By 1996 Internet usage had become commonplace with explosive growth occurring between 1996-97. As interest in this phenomenon continued to grow, so did the interest in Internet advertising. However, the Internet was very new its effectiveness was uncertain, so online advertising was relatively modest. The total advertising revenue in 1997 was estimated at $400-$699 million, 12 times more than that of 1995, but still only a small portion of all advertising spending.
Bob Schmetterer about creating some of the first banner ads in 1994: We wondered how big a deal the Internet would be. How many households would use it? It was still dial-up back then, with that funny noise, and slow to load. Would this become real media?
From 1997-1998 the valuation of dot-com stocks soared to record numbers and attracted venture-capital money while interest rates started to drop, increasing the pool of available start-up funds. Google was quietly created in September while a flurry of other e-brands burst upon the scene, backed by deep-pocketed investors: eToys, Flooz.com, Kozmo.com and Pets.com. Agencies were dealing with a grab bag of clients, the likes of which many had never seen before.
From February 1998 to October 2000, 413 dot-com marketers spent an estimated $6.5 billion in advertising; ironically much of it was spent via old-media vehicles like TV.
With the market now flooded with e-brands, clients were simply fighting for name recognition. Cliff Freeman & Partners’ commercial for Outpost.com may best sum up the creative ethos of the moment. Designed for no other reason than to generate attention and some angry mail—the ad featured an assistant loading live gerbils into a cannon and trying to fire them through the second “o” in Outpost -- but instead sending most of the creatures straight into a cement wall. (What this had to do with a site that sold electronic equipment was anyone’s guess.)
The dot-com marketing frenzy peaked with the airing of Super Bowl XXXIV in January 2000. 17 dot-com companies advertised, accounting for nearly half of all the event’s marketers -- paying an average $2.2 million for a 30-second spot.
By the end of 2000, skepticism about dot-coms’ market viability began to batter their once-stratospheric stock prices and many high-profile dot-com brands began to go belly up. By January 2001, just three dot-coms bought advertising spots during Super Bowl XXXV.