Brands increase focus on niche ad networks: Razorfish study

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Digital agency, Razorfish has released its fifth annual Digital Outlook Report which examines trends in marketing and media buying and distribution from the past year and ahead into the coming months.

Sarah Baehr, VP and national media lead at Razorfish, said the key thing the agency will see in 2009 is measurability and differentiation. “Clients want to maximize efficiency and ROI, but not purely at the risk of being so ROI-driven that they’re not differentiating,” she said. “We have to be a lot smarter with our media dollars.”

Among key findings, Razorfish reports that its client spending in paid search rose from 31% in 2007 to 36% in 2008. But even as search grew as a whole, the speed of growth slowed, especially between the third and fourth quarter—when most companies increase spend for the holidays and last minute initiatives. During this period spend increased only 7%, as opposed to 17% in 2007. This, of course, is attributed to the current recession.

Razorfish also identified 8 marketing trends to watch including shifts in marketer spending in large, more general ad networks. In 2007 Razorfish’s clients spent 72% of their ad network budgets across the top five ad networks. In 2008, that number dropped to 62%.

Baehr said this is due to two factors: the reorganization of Yahoo and AOL’s Avenue A—“when there’s a major reorganization, there’s bound to be a little bit of slippage”—and the proliferation of vertical ad networks that can better reach target demographics.

The digital TV transition in June, Baehr said, will also affect marketers as niche channels and programming increase, and the longtail of television becomes more apparent. She says once TV becomes more measurable, advertisers will be able to take advantage of more opportunities with marketing. “TV will start to mimic the digital world we’ve been playing in in terms of addressability and planning.”
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