Online display ads – the beatdown is beginning


Ben Shepherd writes: So there’s talk in the US that online adspend will shrink in Q1 –

http://money.cnn.com/news/newsfeeds/articles/djf500/200902251344DOWJONESDJONLINE000681_FORTUNE5.htm

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?:)

 

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3 responses to “Online display ads – the beatdown is beginning

  1. Ben, you raise some very good points – and I’m happy to update you. The IAB is doing an extraordinary amount of work at the moment to address the issues you raise in this (and other) blog posts – it’s a full time job working through all the challenges we face as an industry to ensure growth – which is why it has taken time for me to get back to you with an update.

    The core initiatives of the IAB this calendar year are to tackle the so-called barriers to online advertising – be they measurement confidence, operational restrictions, trading barriers, creative or innovation restrictions, and provide marketers, agencies and publishers with a comprehensive knowledge bank of resources to support their increased commitment to online advertising as part of their marketing strategies. We are doing this in collaboration with and response to our own members, agencies, the MFA, the AFA, the AANA and other key industry bodies, and also from learning from our affiliation with the global network of over 25 IABs worldwide what has had the most influence in other markets.

    So – some specifics – we have just established two new IAB Councils – the Research Council and the Standards & Guidelines Council. They will each bring together senior representatives from IAB members – publishers, large, medium and small, agencies, networks and other organisations, as well as the MFA. The Standards & Guidelines Council will address many of the issues you raise, and many more I’m sure.

    Whilst the industry and the members will set the agendas for the Councils, some quick wins are in my view will be–

    o Research Council –
    • Impact of brand on performance
    • Impact of brand on search
    • Online video
    • Cross platform – online + free TV, Pay TV, newsprint, radio, mags
    • Verticals – FMCG, retail, Fed & State Gov’ts
    • Consumer behaviour – general, Grocery Buyers with kids
    o Standards & Guidelines Council –
    • Review and update Universal Ad Package (UAP)
    • Review US/UK online video ad standards – create AU online video ad standards
    • Address recent re-targeting issue
    • Review page auto-refresh standards
    • Review IAB US online insertion order guidelines
    • Work with the Ad Standards Bureau re online advertising standards

    The IAB Measurement Council is already well advanced in its’ commissioned audit of Nielsen’s panel to completely update panel size and composition, offer more robust data on usage at home, at work and both at work and at home, and increasing the size of the panel to produce unique audience data for more sites. Hybrid measurement data – merging panel and server data is also on track to launch in Australia in Q3 this year – the first in the World. This will advance online audience measurement even further to provide publishers, agencies and marketers with global best practice online audience data. We are also exploring ongoing audit capabilities to ensure these new standards continue.

    I hope this helps!

  2. talkingdigital

    thanks Paul, appreciate it – great to get some insight into the IABs plans.

  3. William Zeqiri - Dubai

    Greetings Tony!

    I enjoyed reading your blog. I share the same view as you do in regards to new media.

    I believe most aspects of life in the 21st century are being revolutionised by new media. We often fail to recognise the paradigm shift in the mistaken belief that frivolous or unnecessary technology is being thrust upon us. There was a time, however, when the same measure was applied to motorcars, steam ships, movies, tv and cappuccino machines.

    We fail sometimes to see the changes around us – that children, teenagers (and now young and not so young adults) speak and write a new language defined by technology; that they think with a computer mouse or fingers racing unconsciously on a cellphone keypad; and that they can engage their brain on multiple technological tasks simultaneously. If we view a cell phone as a phone, a computer as a computer, or a smart screen as a white board we deny the revolution and reject the future.

    Television companies have been slow to adapt, some at their peril. Banks have capitalised on the new wave. Companies like ebay, trademe have broken new ground and captured the hearts, minds and the wallets of waves of consumers, sweeping the profit sheets of real estate companies, retailers, travel agents and newspapers behind them.

    He who hesitates is lost. The medium facilitates and the message finds its level in the muli-layed IP community that has evolved in cyber space.

    Cell phones, hand held devices, text messaging, youtube, bebo, myspace, facebook, web TV, blogs, iphone, and devices yet to be released and yet to be invented are not only instantaneous tools of communication, but they are an extension of any individual’s personality, and extend their interactive opportunities and expectation.

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