According to the Interactive Advertising Bureau, U.S. online ad spending grew by roughly 25 percent throughout the first three quarters of last year, compared to the same period in 2006. Growth is steady in terms of dollars, although the growth rate is slowing as the size of the pie gets larger.
According to analysts, there's even room for more growth considering that the internet accounts for less than 10 percent of all U.S. ad spend, but more than 20 percent of the time Americans spend consuming media.
Ad serving technology places ads on websites, counts them, chooses the ads that will make the website or advertiser the most money and monitors the progress of different advertising campaigns. The growth in online ad spend has in turn led to an increase in demand for such ad serving solutions.
The basic technology features offered by ad serving providers are the same; they enable advertisers to traffic and serve ads while offering varying degrees of reporting. Most offer rich media solutions and some are positioned as specialists, but some technology is differentiated by this offering alone.
This limited differentiation has contributed to commoditizing the entire space. So, as ad serving technologies are converging rapidly and margins are being squeezed, the possibility of high end technology becoming free is not just a pipe dream. Google's acquisition of DoubleClick and its launch of a free ad serving tool on the sell side has recently made that dream more of a reality.
Free technology is inevitable (and has been around since the beginning of the web), but as the market learned from Google Analytics, "free" provides a level of support that serious advertisers may find unsatisfactory.
It is not about the technology alone anymore, but about what you can do with it. Although this concept focuses on the buy-side of ad serving, many of the principles equally apply to the sell-side. Companies must spend on resources (either internal or outsourced) to configure and execute on their ad serving requirements, to analyze their campaign data and optimize marketing efforts. In my view, companies that don't fully invest in this level of services will find very little advantage in any ad serving technology, premium priced or free.
Ad serving solutions can have a material effect in the following areas:
- You can drive both strategies and revenue through the integration of technologies such as ad serving, email, web analytics and search. An integrated solution will provide exceptional consistency and simplicity.
- You can reduce costs by providing internal efficiencies through training and support, as well as utilizing the technology to reduce wastage. This includes targeting and frequency capping, ensuring the correct tags are in place and that the general implementation is performing optimally.
- Brand value can be maximized by using rich media to engage with customers. Integration services can also assist in presenting a consistent brand experience across platforms and will enable combined responses from different platforms.
An increased focus on what advertisers can achieve with the technology will differentiate campaigns and brands. Just as a poor tennis player would gain very little benefit from using the most advanced tennis racket, a company needs more than great ad serving technology to get results.