Ben Shepherd writes: So there’s talk in the US that online adspend will shrink in Q1 –
Could the same thing happen here? Probably not … but it’s becoming clear that 2009 is going to be a rocky one for display advertising online that is sold via CPM.
Sarah Lacy has been writing for Techcrunch since Arrington decided to have a break … and she has laid the boot in in a post today. Link – http://www.techcrunch.com/2009/02/25/online-ads-even-the-evangelists-turning-bearish/
“I think the Web industry has gotten lazy when it comes to advertising innovation. There’s too much outsourcing to the ad networks and too much of an assumption by the portals and other large properties that gaudy eyeballs will be enough. That’s old media thinking. It’s enough to get ads when times are good, but not necessarily to keep them when times get bad.”
In recent times I have pretty much scoffed smugly at everything TC has written in regards to the business of media as they seem to get it so wrong, but Lacy might be onto something here.
Has the web industry gotten lazy when it comes to web innovation? Well … no … but some elements have.
Locally expect search and performance/technology to grow and grow strongly. Why? Well … search’s pricing model and ability to scale/localise etc makes it attractive to almost every advertiser in the country. On top of this, many advertisers are only scratching the surface in terms of what they can do. Performance/technology providers like Drive and Adconion will continue to grow as there are elements of what they can that are only just being discovered and once you open your eyes to them they really change the way you view using digital in your communications mix. They have the potential to be real game changers and that is exciting.
Straight CPM may struggle. Why? Well … how much has it really evolved? Have ad placements evolved? Has measurement evolved? Have response rates increased? Are there any really compelling reasons to spend more on banners in an economic situation like the one we are facing now? No one can rest assured that they ‘will be on every brief’ anymore … there are simply way too many options. Is more display required?
Absolutely. There are shedloads of compelling reasons to invest more in display. Problem is, you don’t hear too many. Why should brand x allocate more money to site y in comparison to site z?
Tony Faure back in 2007 at the ninemsn DMS said the following …
“This is the period where great agencies will have to stop blaming the limitations of the medium for poor creative. The arrival of decent broadband means that there’s nothing you can do in another medium that you can’t do in digital – and you can do a lot more”.
I agree with half of what he saying as it stands now in 2009. Technically most things are possible within digital channels – you can use video, flash, animation, sound, data collection, couponing, interactions, games in theory … but there are still restrictions which get in the way of doing this. Big restrictions. Restrictions around size. Restrictions around video length. Restrictions around expansion size, transperency, skinning, placement, takeovers, IP targeting, time targeting, ad serving and the like
And restrictions around turnarounds, optimisation, trading, data collection, reporting and other more administrative areas.
IAB Australia – what are you doing in these areas? It’s okay – you can comment on a blog … 😉
Publishers – how can we find a middle ground to innovate together but do it in a way that works for all parties – publisher, advertisers and most importantly users?
Lacy says “Like so many things in the recession, it’s ultimately a good sign that marketers are panicked. We might actually see some innovation here” (ie, in advertising options) and I think she is right.
And if we don’t I think display might cop a beatdown, as investment will move elsewhere unless it can show its true value.
Liam threw an idea at me earlier in the week about a content theme we can explore in the next month or so around these sorts of challenges. But more on that later …
Liam writes: Interesting Ben. One man’s restrictions are another’s infrastructure.
I would suggest that the ‘restrictions’ are standardising and providing scale to the businesses involved. From time to time some of these standards or guidelines will be proved wrong but standardising is the very key to make digital media scalable, profitable and more importantly easy to execute.
There is a need for innovation on a case by case but the more we standardise the better our growth will be.
On pricing, ya seems to be some downward pressure however it is not very unique to have negative pressure on pricing in horrible recessions. All media, virtually all industry sectors, have this reality.
btw, Ben is beatdown actually a word?:)