Left Bay’s Musings on the Media

Searching for answers in sales and marketing

Insights into major search and ad networks

I recently listened in a conference call between a stock analyst and the head of the Internet Advertising Bureau (IAB). Mark Mahaney is Director, Internet Rsearch of Citi Investment Research in San Francisco. I’m not sure how I got on his distribution list, but he often has sound, economic insights into the major search and ad networks. He set up the call with Randall Rothenberg, the CEO & President of the IAB.

Topics included “current drivers” in online advertising; YTD advertising trends; how marketers are reacting to the current recessionary environment; and key regulatory issues, including privacy.

Some quick notes:

NUMBERS: In 2007, total U.S. interactive ad spend was $21.1 billion. In Q1 2008ad spend was $5.2 billion, up 18% over last year. But these numbers don’t include spending being done by companies doing marketing on their own sites.

AD NETWORKS: Could see growth – or not – because of the recession. The reason for growth: The networks could offer lower CPM costs.

ONLINE VIDEO: Advertising in this medium will grow. Pre-roll, transparent overlays growth are likely.

SOCIAL NETWORKS: Promotion and “infotainment” possible directions that advertisers will veer toward, instead of “traditional” online advertising.

EFFECTIVENESS: 62% of those surveyed by the IAB said there was an “insufficient ability” to measure effectiveness of their campaigns.

BEHAVIORAL TARGETING: The primary reason people love interactive media is the ability to get relative content, including relative advertising. It sits on the other end of the spectrum from spam.

PRIVACY: Rothenberg cited surveys as to why so many folks are conflicted about privacy: When asked if they’re “concerned” about cookies, 85% say they “hate” them. Then asked if they’d rather pay for services they’re currently getting for free, or have targeted advertising that will subsidize services, about the same 85% say rather have free.



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