Thursday , March 28 2024

Future of Internet Advertising

[custom_frame_left shadow=”on”]Future of Internet Advertising[/custom_frame_left]

It’s getting almost predictable, but there’s more reaffirming reports about the good health of Internet advertising. According to PricewaterhouseCoopers and the Interactive Advertising Bureau, the first six months of 2006 delivered tremendous growth in online ads with nearly $8 billion spent. This 37% increase is not only a record but also hints at a permanent shift towards online advertising. It should dispel lingering doubts as to whether our industry is looking at a second dot-com bubble. Advertisers are plowing money in. Period.

Not long ago there was some talk about a lowering of average bids in Adsense and that a high-water mark, of sorts, had been reached in contextual advertising. Advertisers were perhaps growing wary of the revolutionary pay-per-click model. The specter of click devaluation had reared its head. Was this a sign that after a couple of years of feel-good Web2.0 development we could eventually dwindle back to an online advertising environment being something less than satisfactory, like the days after the first dot-com bubble?

Hardly. The fact is that paid placement, itself never rendered an obsolete means of advertising, became more attractive to advertisers because of its affordability compared to contextual. The drop in Adsense represents something like a pendular shift rather than a permanent reversal. The 37% increase in overall spending confirms this. As they say, all boats rise with an incoming tide and $8 billion in online spending means it’s going everywhere – compare that to the largely stagnant numbers of traditional media. Clearly more contextual and paid placement ads are being delivered in a healthier online atmosphere.

What are we up against anyway, television? ICMediaDirect.com was created as a full service online advertising agency. Would we, could we do a TV commercial for a client? Sure, we have people to call and often do work in offline media – why should we or any interactive advertising company worry about conventional media woes when we’re interactively entrenched in the field that represents the “now” and “the future”? Like many others in online advertising, we’re here to ride the crest of a wave and go through the motions of fighting for a slice of a pie that’s fixed in size within a mature field.

Television advertising is an industry that’s groaning under its own weight. Technology has blessed the consumer with more content than ever, while cursing the advertiser by dispersing the audience. There used to be five or six channels, now there are potentially what? 500? Moreover, people are watching less television due to the Internet, video games, and dvd/movies on demand, and any number or combination of new media consumption – traditional television, as we’ve known it, is an ailing giant.

My friend Ryan is from Philadelphia and living in New York, so he doesn’t get to watch his beloved Phillies play too often on television. The Internet has provided a solution, one that exemplifies the boost in Internet advertising spending. Pro baseball’s online home, MLB.com, offers online broadcasts that with ordinary hardware and everyday connection brings him Phillies games that is every bit the equal of television. The television play-by-play announcers are piped in and MLB.com generates fees through usage and advertising between innings. He once called a friend at a game to confirm that what he was watching on his laptop with a wireless connection was only on a second or two delay from the live action. This is a far more appealing proposition than advertising on television. For one, if a viewer cares enough to go online to view – they’re not turning the channel, literally or figuratively.

Advertisers recognize that online advertising is the medium most friendly to technological advance and, thusly, key to capitalizing on the inevitable trends of convergence we see. The eye-popping numbers we see in this week’s report underscore and legitimize the excitement we share when working in a prosperous and still growing field.

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