First Google acquired DoubleClick for $3.1 billion. Then Yahoo and Microsoft jumped in. Yahoo purchasing 80% of Right Media which it didn’t already own for $680 million and Microsoft buying aQuantive for $6 billion. This was followed by Ad firm WPP getting 24/7 Real Media for $649 million!
And all in the last 2 months.
All the companies acquired have one major thing in common – they are all online advertising companies.
According to Wharton marketing professor Peter Fader, there’s a good reason a company like Microsoft is willing to pay an 85% premium for aQuantive: It’s the inevitable evolution of advertising. Accountable advertising – which is being offered by online firms – is the future.
The Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers (PwC) reported online advertising revenue was up 35% in 2006 to a record $16.9 billion. In 1999, the IAB and PwC reported Internet advertising revenue of $4.6 billion, a total just short of revenues in only the fourth quarter of 2006.
Just came across this excellent article: Will the New Online Advertising Models Click? (Knowledge @ Wharton)
Here’s an excerpt:
"As advertisers demand more return on their marketing dollars.…all forms of advertising will be based on accountability and quantifiable results. Marketing dollars will be allocated based on the answer to one question: Did the ad deliver the intended reaction?
…As online and traditional forms of advertising evolve, new measurement techniques are likely to emerge.
According to Kevin Werbach (Legal studies and business ethics Professor, Wharton), online advertising will at some point be able to more accurately measure what consumers do and what they value. "Online advertising has the potential to be radically more efficient, responsive, and measurable than traditional advertising, so ultimately it will be valued using different metrics. At the macro level, advertising will eventually track user attention, which means online advertising will grow substantially," he says.
Although these new metrics are also likely to be applied to traditional media, Patricia Williams (Marketing Professor, Wharton) says these will be harder to track relative to Internet advertising."
Via: Emergic
Hi Eklavya,
couldn't get the article from Wharton. If you could please forward it to me in case you have it as a doc.
I would agree partially with the claim that Online advertising is here to stay. But i dont think it's the most effective.
The internet is still seen as a source of information. But to a specific segment – like the youth (Teen, college, freshers), the internet is still a place for fun. This means that capturing a youth's attention online is still a difficult task.
But then again … traditional media has had their share of success and failures as well. And they still have their own problems !
