As the advertising world descends on Manhattan this week for Advertising Week, the watchword for most is digital. Yet despite the lip service paid that the future of the industry is written in bits and bytes, the Internet after 15-plus years has still not proven itself as a branding medium.

"We need to concede that going back 15 years, without meaning to or thinking about it, we fundamentally created the medium to be a direct-response medium," said Randall Rothenberg, CEO of the Interactive Advertising Bureau.

The Web wasn't built by designers but by technologists. That's led to a layout that, for the most part, is an eyesore—and creates an inhospitable canvas for great creative advertising. AOL, for one, thinks that needs to change.

Today, at Advertising Week, it is unveiling an ambitious plan to not only change the shape of advertising on its pages but the entire layout of the page. Code-named Project Devil, the nine-month effort has included the input of designers and creative agencies in the hopes of finding a way to break advertising out of its forlorn spot on the sidelines of content, where it's too often easily ignored.

"The Web itself needs a new facelift," said Jeff Levick, president of global advertising and strategy at AOL. "There hasn't been a fundamental redesign of content or Web pages."

Project Devil includes new ad units that blur the line between content and advertising. It calls for agencies to assemble new large units—they take up nearly half of the page—from a variety of advertising assets, including video, maps and social networking updates. Moreover, they provide a big canvas for product "hero shots," more reminiscent of magazine spreads than the current cramped banner spaces.

"If we really want to fix brand advertising online, we have to go directly to the creative community," Levick said. "We have to understand the limitations of today's unit that drives them crazy."

Too often, creativity—the heart of great advertising—has taken a backseat to the never ending quest for more fine-grained targeting. Marketers like targeting, but it's hardly the stuff of building great brands.

"[Web advertising] has failed as a rich experience compared to TV," said Nick Law, North America CCO at R/GA. "We do a lot of banner work here. Almost all of it is about effectiveness. As a creative medium, it doesn't have the same narrative capabilities as more traditional mediums."

Rothenberg believes that, at times, the industry has gotten too obsessed with emphasizing technology at the expense of "aesthetics, beauty and cleverness."

The result has been the top creatives in the industry view display advertising as a necessary evil. Instead, they'd rather create across the larger Web, particularly using the sight, sound and motion of video.

Mark Beeching, CCO of Digitas, believes display ads can be reinvented as "dis-play" units: outlets for creative executions in branded entertainment and utilities.

For instance, Digitas poured most of its energies and budget for Philadelphia Cream Cheese into a branded entertainment effort with Paula Deen. The banner portion of the campaign was rethought to use the units to distribute the content directly from the unit, rather than "advertise the advertising," as Beeching calls it.

"That's where we started to get bigger and bigger engagement," he said. "It was a complete shift. It became a very important leg of that campaign."