Can the goverment make Web ads work?

Can the goverment make Web ads work?

CIO Donald W. Lee's department made $3,000 in a month.

Government webmasters are beginning to look again at online advertising'a revenue source that had dried up when the dot-com bubble burst.

One year ago, some Web advertising enthusiasts in state and local governments expected banner ads to generate revenue to help defray the costs of running Web sites. Federal managers watched with interest.

The city and county of Honolulu pioneered the business model and met with early success.

Revenue from the ads helped Honolulu reduce the cost of running its Web site and let it maintain low fees for Web transactions such as driver's license renewal, CIO Courtney Harrington said.

Honolulu had contracted with govAds, a subsidiary of eGovNet Inc. of Columbus, Ohio, to sell the advertising.
It barred ads for liquor, tobacco, political causes and products that can't be sold to minors.

In July, Honolulu and govAds terminated their agreement. The mutual decision stemmed from a combination of factors, Harrington said. 'Ad revenue was drying up, and the clients wanted ads that were intrusive,' he said.

EGovNet has backed off the Web advertising business, according to Tim Bartlett, the company's chief strategy officer. Citing the plunge in advertising revenue due to the recession, Bartlett said, 'Internet advertising has just been obliterated.'

The company remains optimistic that there could be a turnaround. 'We have had a lot of inquiries from states,' Bartlett said. 'We have been honest with our clients and told them the best thing to do is to hold off. When the private sector wants to return to this market, the governments will be accepting.'

Ready when you are

Bartlett said the government Web advertising market vanished last summer, but 'the growth of government Web sites has continued at the pace we anticipated. Hopefully when the advertising market picks up, this will be re-evaluated,' he said.

Keith Mattingly, Honolulu's webmaster, said the city will take a wait-and-see approach. 'We have not given up on advertising,' he said, 'but we are not pursuing it aggressively.'

In Maryland, the state's Assessment and Taxation Department in February launched a banner advertising program on its Web site after three years of study and approvals.

Donald W. Lee, CIO of the taxation department, said his agency charges $250 monthly for rotating ads and $350 per month for static ads. The agency recorded revenue of $3,000 in its first month from four advertisers.

'Our advertising endeavor is in the first stage, and we really can't call it a success at this early juncture,' Lee said.

The department cooperates with Towson University to operate the Web advertising service. The university works through a consultancy called RESI, formerly the Regional Economic Studies Institute.

Towson University students work at RESI learning the Web advertising business, Lee said, and revenue from the ads reduces the cost of running the site.

The department's site features a database of records of real estate and business data across the state.
The site averages 180,000 to 200,000 hits on an average day, according to Lee, which break down to 100,000 to 120,000 page views and 7,000 to 8,000 average daily visits.

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