Revenue Science's president and CEO shares five predictions for 2007, the year that the attention economy will take hold.

A note from Editor in Chief & Chief Content Officer Brad Berens: It's worth pointing out that at the time of publication Revenue Science is sponsoring our Behavioral Marketing coverage, but Bill's byline is in no way a part of that sponsorship. You can find a more detailed explanation of our editorial policy here or contact me directly with questions.

Take a look back over the past five years in online media, and you'll see some interesting trends, troubling concentrations and a dam about to break. These trends will continue to thrust behavioral targeting into the media's mainstream; they will also benefit consumers, advertisers and publishers alike.

Mary Meeker, an analyst at Morgan Stanley, says that search advertising has a compound annual growth rate of 88 percent since 2001. The compound annual growth rate (CAGR) for display ads and sponsorships during the same period? Negative one percent. She also states that Google and Yahoo! account for 58 percent of U.S. online advertising revenue. Google's monetization of page views is seven times better than all publishers except MSN and Yahoo, where Google is still four and three times better, respectively.

However, search is only about five percent of internet activity, and about 80 percent of all internet traffic doesn't have sufficient context to support an effective ad. As evidenced by the negative CAGR in display ads, we see this context-free traffic is the high-growth portion of the internet.

Get the picture? A dam is about to break. Google generates revenue by "delivering …advertising …that is relevant to the information displayed on a page." That is the same thing that premium display advertising generally accomplishes. Display is stagnant and search rules revenue growth, but at the price of massive concentration.

In short, we are seeing that scarcity is moving from pages to people, or more specifically their online attention. For our industry to continue to grow apace, this shift has to be embraced.

Rather than throw out a bunch of dollar figures (that will likely be surpassed) and talk about how behavioral targeting will cause a huge upheaval in online advertising, I prefer to look at some ways that behavioral targeting and the mainstream will continue to come together this year.

1. Consumers will see the value of relevancy
The enormous success of Google -- and search more generally -- has proven that consumers will welcome advertising that is relevant to them if they can also get content that is relevant to them. To date, consumers have narrowly applied this relevancy relationship to search only-- just as advertisers did initially.

However, I believe that throughout 2007, consumers will demand this same incentive for all the digital media that they consume, not only the five percent of online activity that makes up search. This seems obvious in retrospect, since personalization is the dominant trend in almost every aspect of media and technology that you can name.

2. Traditional media companies adopt the phrase "it's all about attention"
In 2006 we witnessed massive upheaval in the leadership of the digital arms of many traditional media companies-- AOL, CBS, Fox Interactive, et cetera. These companies have made a living out of controlling distribution of content to the consumer, often via syndication partners.

Social media, YouTube and the internet in general have shown these companies that distribution is impossible to control-- you simply cannot force people to a particular site at a particular time. The incoming management of these traditional media companies will really understand that attention is the new unit of media distribution, and the keys to the revenue kingdom. Okay, I'm not the first to say this, but I think John Battelle's notion will come to fruition in 2007.

3. Advertisers will understand that you cannot force people to search
I used Google as an example of how relevance works for consumers, and I'm not about to say that search will not be effective, profitable or successful in 2007. However, advertisers will not be able to ignore for much longer the fact that search is a tiny fraction of online behavior: nobody can force people to search more.

To realize the potential of the internet as an advertising medium that truly engages consumers, we must has map valuable behaviors to the other 95 percent of online activity, and behavioral targeting is proving itself as the answer to this unmet need.

4. Consumers like free media
Advertising in online media is here to stay. While there will always be exceptions to the rule, media's subsidization by advertising will continue. So, if we don't see a swing to paid media, publishers and advertisers will have to implement more transparent ad strategies that take advantage of the medium.

That means developing deeper relationships with readers, understanding those relationships better through behavioral targeting, and then leveraging this engagement with advertisers. This objective becomes stronger each year as the variety of digital media proliferates and advertisers seek a way to simplify how they reach audiences across all of these channels.

5. International influence
Revenue Science started operating in the UK and Japan because we saw great potential, but we never expected the double whammy of strong market growth and strong behavioral targeting adoption as it has played out.

Publishers, agencies and advertisers in these markets have really understood and embraced behavioral and are generally more aggressive in making it a significant part of their advertising mix. This is driven in large part by global advertisers, and the success that they are having in foreign markets will influence how they view their global online advertising.

Conclusion
The five things above are just a few of the more visible ways that behavioral targeting will impact online advertising in 2007. However, as I mentioned above, the broader influence of a behavior-centric approach to interaction with online media will change the way that advertisers, publishers and consumers think about this media and the technologies that surround it. The more that we embrace and understand this approach, the more we will all benefit.

So, welcome to 2007. There are great things ahead.

Bill Gossman is the president and CEO of Revenue Science. Read full bio.