Does Google’s bullishness bode well for display?

With Google’s purchase of Demand Side Platform, Invite Media, last year it was pretty clear that their ultimate commitment to the display landscape will continue to grow beyond the independantly impressive AdSense platform and their early adexchange landscape acquisition of DoubleClick.

But in the last week two new notifications can be found, leaving no doubt that Google sees the future of online display advertising as vibrant and in play.

1.  When speaking at the IAB’s recent ‘The Future of Display ‘ event in NYC, Google VP, Neal Mohan explained to the audience that he believes that display advertising spending will rise from $25 billion in 2010 to $200 billion in as little as ‘a few years.’

and

2. Google bought Supply Side Platform, AdMeld.

Is it me, or is this spring/summer is starting to feel a lot like the same time period in 2007?

Things could be worse ; )

Bright Future of Online Advertising says eMarketer

eMarketer released a report today that will bring a collective smile to the online advertising industry. The report, which benchmarks its US online ad spending projections against data from the Interactive Advertising Bureau and PricewaterhouseCoopers, predicts that online advertising spend in the US will reach $31.3 billion this year, a 20.2% increase over 2010 spending. More so, according to this eMarketer article, nearly $50 billion will be spent on online ads by 2015.

 “The internet has become as fundamental as television to advertisers,” said eMarketer principal analyst David Hallerman. “As consumers continue to increase their time spent online and as a resurgent economy continues to bolster ad budgets, we’re going to continue to see an influx of dollars toward the internet. More ad formats, such as video, and more channels, especially social media and mobile, are also key contributors to the spending gains.”

Last week, the IAB held its second annual Long Tail Alliance Fly-In in Washington, DC. CPX’s CEO Mike Seiman, and VP of Publisher Development, Mike Zacharski, joined other IAB member supporters, and 46 small publishers, to tell their elected officials about the importance of Internet advertising to small business growth. The publishers represented 14 states, and spent a day on Capitol Hill meeting with members of the House and the Senate to discuss how the privacy legislation proposed by Rep. Rick Boucher would negatively impact them.

According to MediaPost, the bill “would require companies that track users across the Web to notify them and either obtain their consent — though opt-out consent would be okay if the companies allowed consumers to view and access their profiles. The bill also would require opt-in consent before sites collect or disclose sensitive information, defined as medical records, race or ethnicity, religious beliefs, sexual orientation, financial records and precise geolocation information.”  The Fly-In attendees split into groups and spoke with members of Congress about issues that concern them, such as why they believe cookies are beneficial, and the importance of the fact that IP addresses are non-personally identifiable pieces of information.  This video shows more about the positive impact of cookies on a user’s online experience.

In addition, a new study issued by the IAB on June 10 found that interactive advertising is responsible for $300 billion of economic activity in the U.S.–or 2.1 percent of the nation’s gross domestic product (GDP). Plus, over three million people are employed in the U.S. thanks in part to the online ad business, including 1.2 million with high-paying jobs that did not exist two decades ago, says the study.

“The results of this study confirm the vast influence and driving importance of the ad-supported Internet to the overall economy,” said Randall Rothenberg, IAB president and CEO. “By understanding the total contribution of the Internet to the U.S. economy, we can more accurately assess the impact of potential legislative changes on the Internet’s operations, particularly the consequences of any actions that would alter ad-supported business models.”

When they were not meeting with legislators, the Long Tail members attended training sessions, strategic planning panels and roundtable discussions created specifically to address the business interests of small publishers. Mike Seiman joined Jarvis Coffin of Burst Media, and Scott Portugal of TRAFFIQ/MMi to answer the publishers questions about ad networks.

Mike was grateful for the opportunity to participate in this event, and enjoyed speaking to members of Congress. Read about his experience here on his personal blog.

The benefits of targeting are clear, for both advertisers and publishers. As seen below, more than 60% of agencies were able to increase their clients’ online display ad spending budget as a result of audience targeting.

Publishers benefit from higher CPMs, better performance, and more, as seen in this chart:

Agencies, advertisers and publishers are all concerned about the looming possibility of targeting-related legislation. eMarketer found that the majority of advertisers and publishers, and about one-half of agencies, believe the most effective way to protect consumer privacy is through industry self-regulation. However, many of these advertisers and publishers were unfamiliar with the self-regulatory initiatives already begun by the IAB. Although they know what is at risk if the government takes control of regulation, it is clear that some are still hesitant to take the initiative themselves.

For more on targeting and consumer privacy, check out  these posts, and visit the Online with CPX section of our blog. CPX COO & President, Rob Rasko, discussed these issues in video interviews with some of the foremost industry execs at the IAB Leadership Meeting earlier this year.

By Samantha Karol, Senior Marketing Assistant

Recently I was able to participate in a comScore webinar entitled: State of the U.S. Online Retail Economy in Q1 2010. Here are some of the things that I learned:

Although there is still a lot of progress to be made, the U.S. online retail economy has finally begun to show some signs of recovery.  According to a comScore, e-commerce has grown significantly, and sales are up 6% (from last year). This quarter is the first, since the recession hit, when e-commerce spending has been more than 8%. Since the Recovery and Reinvestment Act, GDP has stopped declining and begun increasing again. There has been a positive growth in GDP in Q1 of 2010, but this is not necessarily a sign of economic progress. The job market is still painting a gloomy picture, and it comes as no surprise that unemployment remains the top economic concern among consumers. Consumer sentiment about the current state of the economy is improving, although many are still pessimistic overall.

A greater focus on price and spending has caused consumers to turn to the Internet more than in the past.  They have also found themselves “trading down” as a means of coping with decreased spending power, and brand loyalty has become less of a priority than saving money. Coupon sites have also increased in importance and popularity, as have cost saving offers like free shipping.  Although consumers are still cutting back on spending, all income segments have seen an increase in growth in retail spending since a year ago. More than half of the major retail segments out-performed the total quarterly e-commerce growth rate of 10%, compared to a year ago.

There has been an increase in the use of social media and group buying sites to reach consumers. People are spending one out of every twelve minutes online, and it has been observed that social media users are also heavy online spenders. In addition to the more traditional social networks, group buying sites have seen significant growth in Q1 2010, and flash sale sites continue to grow.

Twitter continues to have a high awareness, even among those who have never used the site.  Of those who do use it, 23% follow businesses to find special deals, promotions or sales, reviews and opinions.  comScore believes that certain social media myths, such as that the audience is all young people with no money, and that low ad click through rates equal low performance, may be responsible for advertisers’ reluctance to advertise on social media. However, it is clear that those who give into these myths are missing opportunities to reach large groups of people who are already active online.

By Samantha Karol, Sr. Marketing Assistant

CPX CEO, Mike Seiman, predicts the future of display advertising…

As I sit at my desk, a little bored towards the end of a long Wednesday, I decided to just ramble off points about what I think will happen to DSPs and ad networks in the next 24 months in 10 points:

1 – All agencies will own a DSP, and if you are a DSP and not owned by an agency, you will wash away.

2 – DSPs will become less and less relevant, as exchanges begin to build more intuitive interfaces for themselves.

3 – CRMs will be created to manage all exchanges that will be licensed, and not take a % of media, making all agencies realize they might have made a mistake buying a DSP and not waiting.

4- Exchanges will never break out of the lower end of the ad chain, and it will still continue to be Direct Sales/Ad Network/Exchange.

5 – Agencies and advertisers will soon realize they cannot execute an effective campaign utilizing exchanges, and while it’s a nice addition to running a campaign, it can never make a campaign. Therefore, ad networks will still be the best alternative to direct media buying.

6 – Ad networks will continue to innovate, in terms of plugging into exchanges and supply side platforms, to build custom audience segments using data. This will finally be perceived as of tremendous value for agencies and direct advertisers.

7 – Supply side platforms will still exist, and become more and more like exchanges, and less and less like ad networks.

8 – Ad networks will buy more and more unique inventory by arbitraging site traffic at proper cpms, ensuring publishers they will get what they need for their inventory.

9 – Publishers will start to see the real value of ad networks as they gain higher cpms from them. They will also realize that an exchange cannot give them control over cpms, and therefore will only put bottom of the barrel inventory on them.

10 – The ad network and agency relationship will go back to the way it was before all the exchanges and DSPs, except now the ad networks will be back on the cutting edge and continue to innovate for agencies and direct advertisers.

Thoughts from our CEO, Mike Seiman:

This past weekend, I had the pleasure of attending the DC Summit Series, an amazing gathering of some of the youngest and brightest entrepreneurs to ever grace this world.  While there, I had the pleasure of hearing a futurist named Ray Kurzweil speak about the evolution of technology and where it will go in the future.  He explained the phenomenon of how technology generally starts off linear, and moves into an exponential phase, where it grows at a rate faster than people can generally keep up with.  I thought about this concept long and hard, and decided that it could be related to advertising in general. So, I did a little research and here is what I’ve come up with (this is in no way a complete history of advertising, just a few key points to explain my rationale):

1704 – First Newspaper Advertisement Placed

1742 – First Magazine Ads

1843 – First Advertising Agency

1882 – Proctor and Gamble Start Advertising

1917 – First Agency Trade Association Developed

1929 – $12 Million Spent Advertising Lucky Strikes

1939 – TV’s First Baseball Game Aired

1954 – CBS Becomes Largest Advertising Medium in World

1976 – The Supreme Court grants advertising First Amendment protection.

1980 – Ted Turner creates CNN

1986 – Needham Harper Worldwide, BBDO International, and Doyle Dane Bernbach merge to create Omnicom Group, the largest advertising company in the world

1988 – WPP acquires the Ogilvy Group for $864 million, the highest price paid for an agency

1993 – The Internet becomes a reality as 5 million users worldwide get online

1997 – WPP combines the media operations of JWT and O&M to form The Alliance, the largest U.S. media buyer with more than $2 billion

1999 – Internet advertising breaks the $2 billion mark and heads toward $3 billion as the industry, under prodding from Procter & Gamble, moves to standardize all facets of the industry

Okay, so now you can start to see how advertising and mediums for advertising started in a linear fashion.  I haven’t added anything from 2000 on, because that’s when it just starts to get crazy, and the exponential growth goes wild.  Think about how long it took for advertising and agencies to start moving when magazines or TV first started accepting advertising, and look at how short a period it took for online advertising to explode after the Internet was embraced by millions.

Now, the choices are endless, between TV, Print, Online, and Mobile, then it breaks down to Video, Display, Search, Wap, Mobile Apps, In Game, Virtual Currencies, and on and on it goes.  Mix that in with all the choices today for managing your ads, ad servers, crms, optimization, transparency tools, online exchanges, supply side and demand side platforms, ad networks, and who knows what’s next to come.  I guess the overarching point of all this, is that the landscape of advertising is in such a rapid state of change that agencies and advertisers can no longer expect to be able to do it all, they need to start relying on companies that understand the ever-changing landscape to help get their clients’ messages out to the world.

So, I propose the new ad network is one company that can do just that, and at CPX we plan to make sure we understand every inch of the landscape, to provide our clients with the most sophisticated capabilities on the market every second. I could sit here and write a book about this concept and really dig into every last date to show the real exponential growth, but I have way too much work to do, and writing books is not my forte… but, who knows, maybe one day I will.

CPX Interactive is a major supporter of the IAB Long Tail Alliance, and we strongly encourage becoming a part of this innovative group.  One of the many benefits of joining the Alliance is the wealth of webinars they offer. Three webinars will be offered in April. Read on to find out more about them, and click here to register:

April 1^st
Noon EST

Title: Audience Measurement and Monetization for Publishers – Beyond Email
Presented by Datran Media

Description: During this IAB webinar, Datran Media Chief Revenue Officer Sean O’Neal will present strategies and guidance for publishers seeking to best leverage email and other digital marketing technologies to drive strategic business growth. The webinar will first familiarize publishers with strategies focused around the inbox.  O’Neal will then discuss complementary channels to ensure publishers are maximizing both their investment and return. Attendees will walk away with knowledge, case based information and immediate actions they can take to advantage their business.

April 15^th
Noon EST

Title: DIY Web Banners: Easy Self Serve Banners to Monetize Your Inventory
Creatives on Tap Presented By Theorem

Description: Learn how to leverage innovations in self serve banner building technology that allows your advertisers to build interactive banners in less than 5 clicks. Monetize your inventory while keeping costs low and driving higher CPM’s.

April 29^th
Noon EST

Title: Marketing Your Site to Maximize Revenue
Presented by Burst Media

Description: The presentation will address items a publisher should do on their own and when working with third parties to truly market the value of their site.  We’ll review best practices for media kits and marketing collateral, how to position their audience to advertisers, what types of new creative executions are getting attention, and how site design can impact monetization.

In October, we wrote a post about our support of a great new group called the IAB Long Tail Alliance. Today, we wanted to provide some more information on the benefits of joining. So,  here are a few things you should know about the Long Tail Alliance:

• Founding members include: AskTheBuilder.com, Condo.com, DailyMe.com, Destructoid.com, Elfster.com, HowStuffWorks.com, Muxlim.com, PetStyle.com, PrimaryGames.com, TopTenReviews.com, VegSource.com and more.
• Alliance members have the opportunity to participate in webinars designed specifically for long tail publishers to grow their business.
  • The next round of webinars begins February 18th and will be lead by IAB member company, TrustE.
  • The first webinar is entitled: What You Need To Know About Privacy–Challenges and Solutions
• Membership in the Alliance is open to any publisher that sells directly, indirectly, or through a network, and has revenues of under $1 million.
• Enter the promotional code CPXLTA to reduce the membership fee from $250 to $100!!

Visit the Alliance website to find out more about the IAB and the Long Tail Alliance.

Last year, US online ad spending faced the first decrease since 2002. But, industry experts predict that these numbers will rebound in 2o10, as the economy becomes more stable.

Despite the decrease in online advertising spending in the US in 2009, online advertising still continued to grow as a percent of total ad spending. This trend is predicted to continue into the foreseeable future.