46. Jay Schwedelson – was WebConnect the first ad network?

Jay was the founder of a very early ad network called WebConnect, in the second half of 1995, that was notable for taking a then-unusual but prescient stance against the use of third-party cookies for “tracking” — a business decision that Jay admits “was wrong,” ultimately forcing WebConnect to transform into an email-focused services shop.

Today Jay is still living in WebConnect’s home-ground of Boca Raton, Florida, running an agency called Outcome Media — as well as hosting the upcoming Guru Conference for email marketers, at which I’m happy to be contributing some mind-bending insights. In the interim he founded WorldData and SubjectLine.com and is a direct marketing thought leader.

Jay grew up in the database marketing business, starting in his parent’s garage in Jericho, Long Island, where the Schwedelsons bootstrapped a startup that collected and collated terrestrial address lists for consumer magazines such as Sports Illustrated. As a college student in Southern Florida in the ’90s, Jay immediately saw the Internet as an opportunity to build a similar operation for websites.

The WebConnect model was simple: Jay and some friends called webmasters on the phone and asked if they could “exclusively” represent them to advertisers. Text ads were then sold to buyers at a flat rate of $50-100 a month, consisting of text links out to the advertisers’ website. Through the cold-call brute-force method, the startup signed on about 1,000 publishers into its network and began to aggregate themes: e.g., a few dozens golf-themed websites could be packaged as a “Golf Channel” and ads sold through the network to brands who thought golfers were a good fit for their product.

In fervid, microscopic early web — around 1995 and 1996 — Jay found a greenfield, with “zero ads” and no real competition, but that changed. DoubleClick entered as a competing ad network that first year, followed by 24/7 and Real Media and Flycast, and others. WebConnect built a “rudimentary” ad server that powered reporting, as well as a portal for publishers to sign up and join its network. An early goal (as we see from the early website screen shot above) was to get the entire Internet into the mesh, but it became unrealistic.

Notably, as DoubleClick embraced cookie-based profiles of web surfers, Jay found the idea of cross-domain tracking personally distasteful:

I was like, wait a minute. So you’re telling me we’re gonna drop something on somebody’s computer, and then we’re gonna follow them around the internet and we’re gonna see what they’re doing?

And then we’re gonna target based on that? — that’s horrible! This is a terrible idea. They’re gonna get into a lot of trouble … but there was no trouble to get into.

Jay Schwedelson

Cookie-based profiles became a competitive differentiator for DoubleClick and other networks, and then an industry standard, and so WebConnect with left with a portfolio of contextually-targeted sites that did not perform as well as others networks’ audience-based offerings. It ended up losing publishers and advertisers and started to focus on email.

Around the turn of the millennium, many ad networks acquired or built email services. DoubleClick had DART Mail, 24/7 had 24/7 Mail, FlyCast acquired an email provider. These businesses were largely divested later, as lower-growth, leaving Jay to forge a second act under different corporate names — WorldData, Outcome Media — very close to his origin story, collecting personally-identifiable IDs with permission from consumers to be stored in data-bases and used for direct marketing.

Which ultimately may be a more durable — certainly more transparent — approach than web cookies.

Another early website, post-WebConnect but still focused on lists

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