If you are a netizen, then it is assumed that Online Advertising has played a major role in all the activities that you have performed on the web. One shouldn’t be a scientist or a researcher to understand that there has been changes in the form online advertising has taken place over the last couple of decades.
The 1990′s
The 1990′s saw Online Advertising primarily focused on email marketing, classifieds and banner ads. Come the new millennium, there happened a change with contextual advertising in the form of text ads taking the numero uno position.
2005 and beyond
Soon after 2005, Online advertising practically exploded with displays (static, rich media and pop-ups), rich content multimedia and search engines. This latest trend has gathered the maximum revenue and has grown in leaps and bounds.
What will drive the future?
Going into the technical specifications, Online advertising is done by keeping two factors in consideration – users’ demographic information and online behaviour. This is studied by understanding the the user’s gender, age, location, income bracket, browsing history etc. With the changing trends, the online preferences of users’ go through varying degrees of change. As media buyers, the study of the following areas which are doing pretty good nowadays will help strategize for the future -
1. Mobile Technology – The drastic decrease in rates of 3G phones have made them affordable for the common man. With figures indicating increase in data services from mobile phones, there lies a scope of building up a partnership between media buyers and mobile content providers. The future holds good here because presently a few companies have successfully followed this in recent times with the introduction of mobile coupons, product campaigns, click to call services etc.
2. Virtual Communities – The plethora of social networking communities have started acting as a paradise for online advertisers because these communities bridge the distances between old friends, bring together people with same interests etc. People keep on coming back to these sites and therein the advertiser extends the scope of its services and generates revenue.
3. Spreading the word – This is purely intentional in nature and is deliberately done to increase the target audience. This is also termed as Viral Marketing and occurs through word of mouth which results in a buzz being created about the ad. The first step in advertising i.e. attracting your audience takes place through this and then after the chances of a sale increase significantly.
4. Ad Customization – The biggies in this space will soon implement this personalization of ad concept to specific users. Extensive data analytics can reveal the details about a prospective user and thus the advertiser can customize its ad services keeping in mind the user’s needs, wants and desires.
In early 2008, Julie Ruvolo wrote, “Some of the trends in Online Advertising that people talked about were (a) Content versus community ad-targeting emerging as a major debate (b). The gap widening between the proportion of people online, and the proportion of ad dollars spent online“. These concerns are very genuine and our national advertisers should be able to address this issue beforehand so that it does not become a problem for the parties involed.
For sure, Online Advertising is here to say and can only grow big. It is also expected to change its way to reach the masses as it has done thrice over the last two decades.
Ever wondered – Which is the biggest catalyst in Online Advertising ?
It is the ‘money’ that people have and generate from Online Advertising. The APIs will probably be the biggest drivers in the emergence of a new advertising and pricing model in the near future. Let’s wait and watch ‘the change’.
it is quite ammusing that we have become so accomodating to online ads even when we still cry for t.v. channels to give us the liberty to watch ad-less telecasts.
i have two hotmail accounts, and the new layout is not at all inviting, if you hav seen it a good lot of ‘your’ space is eaten by ads which no one cares what it is about.
nonetheless, these obscure ads are a great revenue generator, check the biz-model of Google.
my take: the nxt-gen ads will not be on your desktop, or your blackberry, it will be on you social profile in a 3D world where you are what you wanted to be…wondering, i am talikng about the virtual world of Second Life, your head would go reeling if you were to see how IBM, Intel etc are promoting thier brands ther; that would sound silly unless…unless…u walked in or flew in an Apple store and saw people trying i-pods and macbooks…..beat that!
Probably Yes.
Appreciate your insights.
Advertisers probably forget or overlook the basic thing, i.e. advertising can’t attract attention at all places and at all time. The sooner brands realise this, the sooner it will give way to more meaningfully placed ads at proper time and proper places. Expect to see that soon.
Online advertising has reached about 8% of all world wide marketing budgets. It is almost at the tipping point where it will begin the climb to 90% based on the S-curve. The next 10 years should be some major growth so get ready. Imagine if Google does $40 Billion in revenues, in 10 years they will be doing $400 Billion. Imagine what the online marketing arena will look like with that much revenue with digital trackable online advertising.
Study the Auto industry in 1920 where majority of shareholders sold their shares because they thought the potential was reached. Make no mistake, every major trend does this, it is about to start growing at a rapid very very rapid pace. The last 10 years was slow.
Businesses that stop spending on advertising to save money are the same people that would stop the clock to save time. Be ready… be very ready!
@Deeptaman, nice analysis.
You might want to include blog marketing as well, on the roadmap to the future. A large majority of all online users read/write blogs and readers spend considerable time reading blog entries. As such, the blog posts can be used to advertise new feature launches, product reviews etc. More than ever, brands are recognizing the power of blog marketing across the globe.
For the publisher too, blog marketing is attractive because google likes content and CPM earnings on blogs is typically higher than others.
Thank you Mark & Puneet for your comments.
Mark, I appreciate your analysis which actually is true. You could have hyperlinked some of the facts there. But, anyways, it was still informative.
Puneet, Sure we could have included Blog Marketing too. That surely is an add-on.
In 1920 majority of shareholders sold their stake in Ford because they insisted the auto industry had reached its peak. Maybe they were right in light of the events with the Big 3 recently.
Many are saying that Online Advertising has reached its peak already.
Major trends follow the S-curve where it takes 50% of the time to reach 10% of the market and the same amount of time to reach 90%.
With that logic, online advertising is now at 8-9% of all marketing budgets. It would be a strong indicator then in the next 10-12 years it will be 90%.
We are about to witness a major shift and transfer of wealth. Which side will you be on? Online Advertising with FreeKii.com served over 40 million ads in 2008.