Chip Royce, Flywheel Advisors – November 15, 2022
I have the dubious distinction of placing the first keyword search ad online in 1996. This is a life event I filed away in my memory banks and seldom mention. Special thanks go out to my new friend Leslie Carruthers, a search engine marketing expert from TheSearchGuru.com, who, after learning of my unique (obscure?) place in ‘history,’ encouraged me to share this story from early in my career. Here’s how that transpired…
Welcome to The Wild Wild Web
In 1995, internet publishing on the web (aka ‘The World Wide Web’ or ‘W3’) was akin to the “wild, wild west.” Websites were mostly hand-coded in HTML 1.0, a very limited markup language. Visually sites were awkward, mostly text and a few small images highly pixelated on our 800×600 displays. Internet was delivered over the phone via modem, or if lucky, your office had a DSL (a wired line running at 128K or 256K). In any case, pages loaded slowly; however, the bandwidth required was also low, as images were small if any, and we did not have much in the way of audio or video.
I had the tremendous opportunity to join a company called InterZine Productions, founded by a former IBM executive, Brian Henley. Henley, who previously led a joint IBM/Blockbuster Entertainment interactive content initiative, envisioned media properties that delivered sports content and community through online services such as AOL & Compuserve (now I’m dating myself) and the fledgling World Wide Web.
AOL itself initially backed InterZine under a program called the “AOL Greenhouse,” which funded content creators of original content to help AOL differentiate itself from other online providers. Like others at that time, the company operated more like a production company rather than a tech developer. At that time, the AOL Greenhouse was headed up by Ted Leonsis, the current Washington Capitals & Wizards owner. The Greenhouse’s vision was visionary for its time in many ways. Not only was it ahead of its time to create original content for the AOL platform. The Greenhouse identified verticals and companies that are still relevant and topical today. iVillage was a leader in women’s interests and empowerment, and two companies from the original seven are thriving today with the Motley Fool, a survivor in the online investing space, and The Knot, a publicly traded leader in wedding-related content and e-commerce.
Henley’s vision for InterZine was to identify many affluent sports verticals and partner with leading editors and personalities to create branded online properties. These properties differentiated themselves by partnering with leading writers and sports personalities to generate feature content to augment commodity news and scores and leveraged those personalities to participate in deep communities for users, including active chat, message boards, fantasy sports, and in-person meet-ups. Revenue would come from paid advertising, promotional partnerships, and e-commerce. Golf was the company’s first vertical, and Henley and his golf editorial team launched iGOLF.
Screenshot of YAHOO!, Recreation>Sports>Golf page,
provided by the Internet Wayback Machine, showing an iGOLF ad banner, captured from November 28, 1996
Joining an Internet Startup in 1996
Out of college, I worked as a marketing analyst for a consulting firm outside of Boston. Through that role, I stumbled onto the web, learned about web browsers, and recognized the potential marketing value of making websites as dynamic publishing vehicles vs. brochures. I started building websites for friends under the name “The Communications Bridging Company” and registered “commbridge.com”. Hindsight suggests that may have been something that I should have continued with, as larger agencies purchased many Boston web agencies of that era for premiums to meet the growing demand for interactive talent.
Around this time, I was considering a pivot to the technology sector from the work I was doing in consulting and wanted to get my MBA. We planned to move to North Carolina, get settled, attend UNC-Chapel Hill for business school, then figure out our chapter.
As a die-hard golfer, I was enthralled when I found out about iGOLF on AOL and was an early member of the iGOLF user community. I soon met and had a few conversations with Brian on AOL and the iGOLF service. I don’t remember exactly the order of how things occurred, but we arranged to meet up on one of his visits to Boston. Over a beer in Harvard Square, I was offered the opportunity to move to Florida, join iGOLF as employee #5, and start by leading the migration of the AOL-based iGOLF service to the web.
My then fiancee Sarah, now wife of 27 years, and I packed up and arrived in South Florida eager to get going and enjoy a much warmer lifestyle.
I got to work, tasked with figuring out what resources we had, and with most startups, learning how to work with the unique cast of characters in other departments, including editorial, creative, technology, and operations, who Henley also recruited to join the team.
We figured out the server infrastructure we needed, designed the site for the web (compared to AOL’s unique publishing platform called “Rainman”), and made iGOLF available to the public via the web. The next challenge was to grow our audience.
Online Advertising in 1996
The golf space was surprisingly competitive with websites such as golf.com, GolfWeb, and Thor’s Golf Links, but we still had plenty of green space to capture. We partnered with different websites and the fledgling search directories of the time to syndicate content in exchange for traffic.
How did we measure traffic? We downloaded and parsed our server log files in spreadsheet software for analysis. Fortunately, some good software came along, not unlike Google Analytics of today, allowing us to measure site visits, unique users, and page views.
Soon, the opportunity to buy traffic also arose. Search engines didn’t exist yet. The closest thing was various “search directory” sites that categorized known sites by topic, used by consumers to discover content. Yahoo!, Lycos, and Excite were the leaders. Each eventually started to sell ad placements within their sites on a CPM model.
These ads were pricey, anywhere from $20 to $70 per 1,000 impressions. I led our ad buying, developed a set of metrics to ensure accountability for myself and the advertisers, and had carte blanche to acquire quality traffic. The volume of impressions was lower than my budget.
At the end of each month, a publisher where we placed ads (in this case, the search directories) would send over spreadsheet reports detailing the pages where ads were placed and the ad performance, including the number of impressions and clicks.
The challenge with the search directories is that they had a limited quantity of page views for the placements we desired. Our goal was to have ads on high-context pages: directly related to golf content, golf courses, equipment, etc. We also identified topics that we knew had a solid crossover to golfers (ex: luxury cars) or cities where golf tournaments were being held that weekend. The media sites, especially the search engines, would attempt to bundle in ‘run of site’ advertising in their ad packages. ‘Run of Site’ is a code word for excess inventory. Any page they could not sell and likely did not have context for our brand was a waste of ad spend. For instance, and I used this example often, our ads might show on a Yahoo! page “Parenting>Mothers>Breastfeeding” which missed the brand and traffic objectives.
Why Can’t You Serve Ads When I Type In A Search Phrase?
OK, so the setup to get to this point of my story took a little while, but it has been fun to remember the details.
Yahoo! at this time was just a search directory and was only a group of technologists out in California, along with others who had a content background. They outsourced their advertising sales to a group in Atlanta called Flycast Communications, provided the ad-serving technology, sold the ads, handled customer management, and took a hefty chunk of the revenue.
I contacted my rep at Flycast. If I can remember the name later, I’ll include it here. We went through a monthly performance report together and as a good ad buyer, I started my negotiation by saying, “There’s a lot of value here in the Golf and related keywords.” I continued, “However, in the examples like ‘parenting,’ we’re looking for brand exposure to our target audience and, more importantly, traffic. That category doesn’t seem to generate brand exposure, and we’re not getting traffic, as shown by the report. I’m concerned that there’s waste in our spending.”
The Flycast team couldn’t argue.
At the top of the Yahoo! home page, I pointed out, “There’s this box that says “Search.” How can I have my ads shown when someone puts in the word golf there? That’s exactly what I want. Right now, you’re asking for a premium when I specify specific categories vs. run of site ads. I’d continue to pay that premium if I can also get an ad placement against the search terms.”
The Flycast folks went silent. They eventually replied, “We don’t have any way to filter and display ads based on that. What you’re asking for is reasonable. Can we talk to Yahoo! and get back to you?”
The First Keyword Search Ad Buy
I didn’t hear back from Flycast on the search box for two to three months.
Finally, I got a call. “Chip, we liked your suggestion about matching ads to the search box, and Yahoo is almost ready to start serving ads. They’ll be at a premium. We’ve identified the keywords you want based on our collected data and created a package for you. We can’t make this exclusive as we have other advertisers to be fair to. We can start in a few weeks.”
Yahoo! saw the search box as a tremendous business opportunity, initiated a PR campaign to support the new ad program, and asked me to speak with reporters about the idea and value of the product. Yahoo! and Interzine received substantial press coverage for this initiative, which seemed to catalyze their growth.
So yes, I have the dubious distinction of being the first or one of the first to place a search ad on the internet.
For anyone who’s run search campaigns over the past 15 years, you probably have a love/hate relationship with Google, Bing, and other websites. Please don’t blame me for all of this.
I’m sure the idea wasn’t that novel. I was perhaps a few months ahead of the curve and probably shaved a few months off of what would eventually happen anyway.
By The Way…
I’ve been searching for the interview I did for “Internet World Magazine” which was a quick lesson on PR training and how to choose words very carefully when speaking on the record.
I was quoted as saying, “The search engines, they aren’t the be-all and end-all (of online advertising).”
Journalists often pick and choose the words they want to make their points.
This quote was just only part of a statement I made, outlining that publishers like Interzine provide specialized, vertical content that can provide much higher value to the reader and advertiser than what a broad search engine provides. While I supported Yahoo! as a publisher and fellow media entity, InterZine has a valuable place in the media landscape.
As 2022 concludes, looking at the stock market and with many search engines down 50-75%, either: A) this statement in and out of context rings true (whew!) or B) the wealth generated by these companies has been extraordinary, and a horrible prediction due to the amount of economic and technological value created.