PITTSBURGH — THE information highway of the future will cut a wide swath through today's business world, creating new industries and challenging old ones. Perhaps the industry with the most to gain -- and lose -- is advertising.
What should an Internet ad look like? If everyone picks -- and pays for -- only the news and entertainment they want, who is going to choose to look at the ads? And how are they going to view them: on a two-way TV set hooked to cable, on a computer linked to the Internet, or some other hybrid technology of telephones and satellites that's still on the drawing board?
Advertising agencies have faced mounting criticism from clients that they are failing to exploit the new media, most recently from Bell Atlantic Chairman Raymond Smith. Last week, the industry responded. An industry-backed group, called the Coalition for Advertising Supported Information & Entertainment, released a report outlining how it plans to take a leading role in the emerging world of electronic, interactive information.
The report itself was short on specifics because, well, no one knows yet what the new media will look like. It's ''very hard to get valid response from consumers without their being able to touch and feel the product,'' said Judy Black of ad-agency Bozell Inc. Still, some early surveys and experiments summarized by the report suggest certain possibilities for ad agencies.
Education over sports
One important finding is that consumers want the new media to provide information, not just entertainment. Louis Harris and Associates found last October, for example, that more people wanted electronic information or education services (63 percent) than sports and entertainment (40 percent). Most of that information should be news and consumer-related, the survey found, but advertisers could have an opening too.
When a Canadian interactive television service offered viewers alternative ads, it found that viewers who made a choice had 40 percent higher recall of the commercial than those who had watched the default ad.
The trick will be to package ad information in a new way. When Advertising Age asked more than 1,000 adults last fall whether interactive services on home computers and televisions should include advertising, two-thirds said no. But when the Roper Organization last year asked if people wanted information about specific products and brands through the new media, just over half said yes.
Most experts say advertising will somehow find a place in interactive services.
''I can't imagine it will kill advertising,'' says Betty Winfield, a specialist in mass-media history at the University of Missouri at Columbia. But ''it will take a new form.''
The new media could make advertising more substantive. ''It's going to be more information-driven than image-driven,'' says Dina Roman, director of new media advertising for the New York Times Information Services Group. People ''are not just going to want a picture of that product, they're going to want information about that product.''
For advertisers, space in the new media is likely to be cheaper because the distribution costs are so much less than traditional media. Some ad executives argue it will also spawn new interactive experiences, such as looking under the hood of an on-line ''car.'' Others doubt the new media offers much revenue potential and, thus, are leery of making a big move onto its first incarnation, the global network of computers known as the Internet.
But dozens of small, on-line agencies are aggressively pushing Internet marketing, especially on the graphical part of the Internet known as the World Wide Web. Some of these on-line agencies offer to create electronic storefronts -- known as ''home pages'' on the Web -- that introduce users to a company. Other entrepreneurs are trying to create services that are so popular with readers that companies will flock there as well.
One such experiment comes from a company called Mecklermedia Corporation. It is bringing together a host of information services -- from legal and business publications to a senior-citizen computing group -- in the hope that by offering some information free, these groups will be able to sell more of their products.
Another new company, Internet Marketing Inc., is structuring advertisers' messages so that readers can easily respond to them. The company's interactive demonstration, called CyberSight, offers trivia quizzes, a space for writers to publish their work, and other free enticements to lure readers. Internet Marketing claims CyberSight gets between 5,000 and 15,000 users daily -- a big start in a medium just getting launched.