Delivery of information when, where and how consumers want it is the new name of the game. An Atlas SVP explores the future possibilities this opens up to marketers.
The purchase of DoubleClick by Google, 24/7 Real Media by WPP, Right Media by Yahoo! and Microsoft's acquisition of aQuantive all lead to the same conclusion: online advertising (inventory and technology) is the new digital land grab. It's not coincidental, as the world's largest media and internet companies are jumping on the Web 2.0 bandwagon.
Let's define Web 2.0 as consumer-oriented media, which includes user-generated content (UGC) as well as mobile, RSS, blogs, games, streaming and -- one of the most fascinating nascent markets -- IPTV. Embracing the revenue-generating potential of just one of these Web 2.0 internet segments, 80 percent of large international enterprises believe that social networking technologies can improve revenues and margins, according to new research conducted by the Economist Intelligence Unit (EIU). The research, which is based on a survey of 406 senior executives from companies with average sales revenues of $2.5 billion, reveals something we in interactive media and marketing have known for quite some time: Web 2.0 technologies and social networking media are not just "must-have" additions to "augment" existing communication channels; they are necessary to communicate effectively with today's new consumer.
Web 2.0 is about the consumer using technology to transfer relevant information faster, and better, in the medium of the consumer's choice: blogs, UGC, email, mobile channels, search and video. Because Web 2.0 has increased the importance of reach for both businesses and consumers, I would argue in the wake of the Google/DoubleClick and Microsoft/aQuantive deals that ad serving and management is the defining component of Web 2.0.
After all, marketers have to reach consumers and businesses where they access their media, which is now almost exclusively online. The latest eMarketer data released in April 2007 shows that 73 percent of adult females and 79 percent of adult males in the United States are online. For companies that have already embraced the Web 2.0 concept, recent financial success can be directly attributed to advances in ad serving and its supporting infrastructure.
Ad serving solutions now give advertising firms and companies the ability to decide where to run their ads, with geo-targeting and contextual tagging to enhance user experience and raise conversion rates. Advances in analytics enable advertisers and companies to test and quickly change their ads while limiting the amount they spend on ads. CPM-based ads no longer dominate the market. Intuitively, CPA-based ads are increasing; not surprising when one considers that companies prefer to pay for ads that have proven conversion results.
So what does ad serving in Web 2.0 look like?
Following a consumer -- in this case, "Chris" -- on his way to the baseball game illustrates a current and future Web 2.0 consumer lifestyle:
Unsure of traffic, Chris walks out of his house calling up directions on his wireless device or smartphone. Shortly, directions arrive with a traffic update, mass transit options, a map, several links to restaurants near the stadium and the local paper's sports page. Deciding to walk, Chris makes a reservation at one of the advertised restaurants by clicking through an advertising link, where he is informed that he will receive free desert by making a reservation through the web; so Chris decides to forward an Evite from the restaurant to a friend asking the friend to join him for dinner after the game.
On his way, Chris stops by RadioShack to look at new printers. After finding one he likes, he scans the bar code of the printer with his smartphone to conduct a comparison web search. Immediately, Chris is presented with a list of comparable printers and other stores that offer the same printer at a lower cost. Deciding to wait on buying, Chris proceeds to the game.
Chris waits in line at the stadium, playing an internet video game on his smartphone, when he is served an in-video ad to buy the album of the band whose music is playing in the background of the video game. Enjoying the music, Chris downloads the album onto his smartphone and receives an email notification that the same band will be playing in his town the following Friday. Again, Chris forwards an Evite to one of his friends.
As illustrated above, search and ad serving are the vehicles within Web 2.0 that link the consumer with media. In order to reach consumers, Web 2.0 advertisers and agencies will have to pursue multiple web media publishers. Publishers must deliver in VOD, gaming, mobile media channels and video.
Whatever solution advertisers and agencies choose, Web 2.0 ad serving must be able to access and aggregate analytics from other sites and sources in real time. Any digital publishers not considering the significance of Web 2.0 within the context of their ad serving and management will be left behind by the end of the year and moving forward.
What do the recent mergers have to do with Web 2.0 ad serving?
From a technological standpoint, the recent slew of online advertising buy-outs is very good news for consumers. Pre-Web 2.0 technology companies and media companies were separate corporate cultures. The Web 2.0 concept represents a seamless integration of the verticals that focuses on better technology faster and an enhanced user experience.
To stay competitive, companies, advertisers, agencies and publishers will have to simultaneously leverage both verticals. By joining technology and media, aside from the inevitable confusion and possible turf wars, consumers will be left with better, contextually relevant, content rich search and advertising, in any media they choose.
Brian Handly is senior vice president, sales & client services, Atlas. Read full bio.