Broadcasters, marketers and media buyers agree, because we now live in video-on-demand world where consumers control what they watch and when, broadcast advertising model is broken. And although the media industry is still sorting through their position on the television news perhaps even greater concern is that due to severe economic conditions facing the world is going forward in 2009, all signs in the online ad spend next year dip. What can media companies and advertisers for ads floundering this ecosystem? The short answer: it will have to change the way advertising is bought and sold, measurement and presentation.
Reduce traditional TV viewers. In October, the four biggest broadcast networks reported a fall in the audience between 18 and 49 many analysts believe that the eyes are moving from TV on the Internet. Advertising Age, in a study in social networking and its impact on television, that 25% of those using social networking sites like Face book are indicated by spending less time watching television because of the time being spent online. And more than a third of all 12-64 year olds indicated that they use online social networking sites regularly. readers taken from television, as well as the use of digital video recorder time changes (DVR) technology such as TiVo to skip commercials while watching television, advertising dollars, which the broadcast media in decline.
Therefore, companies should follow their media, online audience right? Images are not clear. The current economic climate will reduce ad spending across the board. TechCrunch suggests that in the third quarter, Google, Yahoo, Microsoft and AOL are just eked up 0.6% at the same time in the online advertising revenue quarter over quarter. MediaPost.com said, although online ad revenues up 11% of the current year, compared with growth of 26% last year, growth has stopped, but all in 2008. They predict that in 2009 the first year in the flat for online ad spending since 2003. Others offer an even darker look. In a survey of participants in the New York private equity firm Attach Capital Bar concludes that the most anticipated digital marketing budget will be down 10-20% in 2009.
And rates are even worse news for media companies: advertisers pay for their digital advertising space, as traditionally measured by cost per thousand impressions (CPM), tends downwards. Research by Morgan Stanley, the average cost per thousand impressions for banner ads declined from $ 3 to 1 U.S. dollar in the last decade. Agreed that due to the expansion of available supplies (the area on the internet to show the ads). In China, advertisers pay as little as $ 0.05 CPM for rapid explosion of inventory. Media Post and anticipate that this decrease in the amount advertisers pay for advertising about online video in 2009, an area which enjoys a two-year class of CPM.
But what is the social network where television viewers are drawn? And they offer hope? Capital Ribbon found that 68% of respondents consider social networks are “the most powerful position to spread” between alternative marketing channels for the next two years. Advertisers see huge potential in social networking as a channel to better target advertising to users, as all personal information shared. I see include the opportunity to tie the traditional media and social networking. Electronic media have begun to include community features to its online video player. Companies such as Groan to capitalize on social networks like Face book for sharing video social.
At first glance, then, social networks appear to offer promise as an advertising specialist in the economic downturn. Sites like Face book, MySpace and YouTube boasts a large number of views, more than the average number of hits per user, and for a long time for the average site. The CPM-driven world, this is a great swimming pool views virtual wealth of resources “inventory,” given the large number of eyes. The problem, however, the data show that the actual performance of ads on social networks is quite boring. Click-through rate on these sites is 10-10 times less than the average for banner ads, already 0.1 percent to 1 percent range.
Dr. Augustine Four ago, senior vice president of Digital Strategy with MRM Worldwide, a digital marketing agency, the nature of social networking sites to be unsuitable for traditional advertising:
Like most Web 1.0 sites (Google, CNET, New York Times, etc) are united and support the mass audience included many of the largest sites reviews Web 2.0 social networking sites in nature. These two types of sites are very different users. Go 1.0 Web sites and portals to read content or e-mail users go to Web 2.0 social networks to interact with others. And often are so immersed in this interaction is even less likely to see, let alone act on, ad; despite the large number of visits generated the session can be explained, in part. Lower than the rate of clicks on ads on social networking sites. ”
Ted McConnell, general manager, interactive marketing and innovation at Procter & Gamble Co., postulates that social networking is not only an efficient channel for advertising, which are wholly inappropriate in markets where trying to do to alienate consumers. McConnell raises questions advertisers: “What in the heck do you think you can monetize real estate in which someone breaks up with a girl?” It makes the point that “social media” right “media” at all. Media is a means of communication which includes an empty space that includes a list of advertising. Social networking is a dialogue between consumers, where advertising is becoming disruptive. Users do not intend that the media, they intend to talk to someone.
If the TV ad revenues declining, and digital ad spending tends down generally, and social networks fail to meet their obligations to consumers, advertisers and media houses to the storm? Advertisers must ensure that they get the best return on investment can the remaining dollars in ad spending. Rather than paying for the majority of eyes need to focus on advertising in the best position to make the transition. Online, probably signals that you need to transfer from the CPM model where advertisers pay for the number of people who will see your ad, performance-based measurements. Data model based on the performance of the advertisers pay only for clicks or other activities targeting consumers.
McConnell predicts that the economy gets worse, the fate of advertising based on performance up to the model based on impressions of trips. “Spray and pray ‘is slightly more difficult when you are under economic pressure,” he said. “Therefore, advertising will be performance-based portion of the cost per thousand impressions.”
A by Dr. Four, “said advertising web 2.0 landscape, many advertisers have moved beyond cost-of-impression (CPM) model for accountability and measurable cost-of-Click (CPC) model (eg Google Adwords ) where you pay only when users click, no matter how many times an ad is displayed. Some have even gone on the next step. Cost per action (CPA), in which advertisers pay until the steps desired user, for example, make the purchase. “
As companies respond to the request for media advertising based on performance? It is not enough to simply list available, and now the company has to ensure that the ads be in force. This means that it is more important than ever to target the right customers are advertising right time. The media companies need to work directly with advertisers to ensure advertising is tightly integrated with content in ways that provide the right context and time for the message.
Channel which provides some interesting promise for targeted mobile content. Attach responses in 62% of survey participants mentioned the bar as a mobile advertising platform that will grow up in the next two years. Mobile has the potential to target consumers in just the right time and right place. Imagine walking into a pharmacy and receive a coupon via text message on your mobile phone for pain relief over the counter. That’s the power of advertising based on location, it is possible dissemination of Global Positioning System (GPS) technology on mobile phones, enabling providers to know exactly where you are. This is not science fiction – companies like Loop and Nave have already begun to serve ads based on location of the phone in your area.
And while social networks may prove to be the holy grail is to provide a channel for advertising, their enormous potential for understanding and targeting customers can still key to effective advertising world focused on performance. Dr Four explains that “by redefining the social network as discussions” on clients of joint activities, evidence of online sellers can use them instead of social networks such as the location for such research, test messages with real clients in the real environment, how to listen to consumers describing your products or services with peers, or to get ideas for new products or improvements to existing products and in the end, advertisers are able to identify the impact , Ravens or ‘Heavies’ in social networks (the most active in talking, sending or distribution) and leave. Them beta test and write about their product or service. ”
Not only social network to help advertisers better identify, understand and influence the target, they have the potential to expand exponentially their own hands. According to advertising, with new evidence that the network mapping relationships with clients – creating so-called social graph – can be just as important as traditional segmentation and targeting, to predict how people respond to marketing messages. “The idea is identified only its target market of consumers, but the market with other people in the social network of users. The theory is that advertisers contact” customers already connected and shared values and beliefs, a concept called homophile. Yahoo and many small business start-ups will begin testing this hypothesis.
Finally, there may be hope for television. In early November, the deal struck Dish Network advertising companies Invade technology include creation of “senior receiver” can “introduce targeted advertising and commercial,” and insert dynamic. According to Advertising Age, what it means to “] the [Father bombing millions TV viewers with ads for things like that many of them may be looking to buy, marketers can send the next 2-3 years different advertisements different kabahaian – make some, for example, Procter & Gamble does not need to pay for diapers without the couple likes the small ad watch and General Motors does not have to run ads for Hummer vehicles in a house full of people interested Pries ” Industry experts believe. If users are presented with relevant advertising, they are much more likely to skip commercials with DVR.
