As we start the new year, Revenue Science's CEO examines some key changes to the online landscape that will affect how marketers connect with consumers through BT.
No one can argue with the fact that 2007 was a year of amazing growth for our industry. With internet advertising revenues exceeding $5.2 billion for the third quarter of 2007 -- another revenue milestone -- it has been a year of incredible change, not only in behavioral targeting technologies, but also in the structure of interactive advertising as a whole.
In a joint study between the IAB, ANA, AAAA and Booz Allen Hamilton, more than 80 percent of marketers surveyed indicated that consumer insights and behavioral targeting are major priorities for them, while sponsorships and event marketing came in last, at 32 percent. This is not surprising as we are continuing to see a shift from more traditional mass marketing models to methods like behavioral targeting, which enables us to better understand the true needs and desires of our future customers -- and to start treating them as something other than a "pair of eyeballs."
Only time will tell what we really learned from this past year. In the meantime, here's a look at a few of the high points that helped us reach our current position of growth.
The rise of social networking
While not all of us opted to create a personal web page to share our myriad interests and occasional thoughts with the world, there's no denying the impact that social networks have had (and will continue to have) on how people approach the web.
A number of social sites were launched this year. While many seem more like a giant Rolodex, others have allowed us to more effectively share ideas, track events that are personally important to us and, in short, place our respective fingers on the pulse of what's happening around us.
According to a recent report from eMarketer, ad spending on online social networks worldwide will climb from $1.2 billion for 2007 to nearly $2.2 billion by the end of 2008. The majority of this spending, $1.6 billion, will come from U.S. advertisers. Currently, MySpace and Facebook together account for 70 percent of that advertising.
While this is good news from a growth standpoint, Facebook's recent tracking and reporting issues have clearly driven home the message that data transparency is the watchword. Social networks represent a huge opportunity for marketers looking to target very granular audiences with very specific interests. But, if handled incorrectly, the model could end up driving people away.
The ever-changing needs of consumers
Behavioral targeting has enabled us all to refine our understanding of what it takes to reach the right people with the right message at the right time. This insight, in turn, is helping us understand new patterns of human need, and offers us ways to structure marketing programs so that we can use what we've learned about our prospects to create appropriate and meaningful "conversations."
We're also learning that the shelf life of human behaviors can sometimes be measured in mere minutes, as the folks we are trying to reach are all going through continuous personal evolutions.
Not only do consumer needs and intention change over time, but we're also all going through life stages that often serve as great predictors of future needs. We readily recognize that new parents have different needs than parents with a child heading off to college, and that the young person entering the workforce has different needs than the new retiree. But, we're also learning that what consumers want to do on a Saturday night may differ greatly from what they would choose to do on a Thursday night.
Recognizing that the people we're trying to reach are constantly in a state of flux makes the tracking process more difficult, but it also makes the results that we end up with a lot more meaningful.
The mobile audience of moving targets
Not too long ago, marketers could easily reach all the consumers they wanted in one fell swoop by broadcasting a single message. Today, the audience that once crowded around television sets has dispersed to become hundreds, even thousands, of distinct groups.
For some, the internet has become the million-channel TV set. For others, being tied down to a computer is "so last year," and so they've embraced mobile computing as a primary way to stay in touch with the world. This flexibility has enabled consumers to follow very personal paths, but has also created a large challenge for markers looking to reach them while on the go.
Understandably, there are some significant obstacles in the mobile marketing world. Consumers have made it clear that they don't want to be advertised to on their cell phones and other mobile devices. There are also the ever-present concerns surrounding privacy. As new models come into play, we're learning more and more about effective ways to reach on-the-go consumers with offers and solutions relevant to each individual.
Mobile targeting is still learning to crawl, but we all recognize the significance (and market share) that will come with finding mobile targeting models that meet the needs of both marketers and consumers. This, perhaps, will be the area of largest market growth for the foreseeable future.
And what's in store for 2008? The only thing that can be guaranteed looking ahead is that it's all going to keep on changing.
Here's to it changing for the better.
Bill Gossman is president and CEO of Revenue Science, Inc. Read full bio.