Column: Where Consumers Lead, Advertisers Follow

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The typical consumer spends more time online than watching TV, listening to the radio or reading newspapers or magazines, yet advertisers still spend the fewest ad dollars online. As advertisers let go of the notion that online marketing exists solely to generate leads, more ad dollars will be spent online. Research firm eMarketer projects that online ad revenue will exceed $22 billion in 2009, up from less than $10 billion in 2004. So what does the future hold as marketers get on board with online?

Booming behavioral. Behavioral targeting was arguably the hottest online ad trend of 2005. By serving advertising to consumers based on their online behavior, such as Web surfing habits and responses to ads, behavioral targeting can deliver precisely targeted advertising to a solidly in-market audience. Behavioral targeting falls into three categories:

  • Adware solutions observe behavior via user-downloaded software: highly targeted, but privacy is an issue.
  • Site-side solutions target audiences within a publisher's site: targeting is good, but reach and duplication are sub-optimal.
  • Network solutions target audience behaviors across a network of Web sites, combining a targeted audience with sizable reach.

Behavioral targeting's continued success will depend on overcoming several challenges, mainly related to privacy. Advertisers are wise to partner with vendors that adhere to all privacy regulations and should establish upfront exactly how collected data will be used, shared and owned.

Search stays strong. Search engine marketing is one of the most effective means to reach and convert an in-market audience, and it is growing. Watch for opportunities generated by new SEM offerings such as pay per call. Pay per call lets marketers track conversions generated from phone numbers contained in their search listings. This lets direct marketers who leverage call centers monitor a previously untracked metric.

Rich media rising. Broadband is now the norm, and more than 75 percent of U.S. publishers support rich media. Rich media is a more interactive form of online advertising that includes motion, sound, video and user response - enticing to creative personnel who have grown tired of working with static banner ads. Rich media can be automatic or user-initiated, and research shows that consumers are more likely to buy a product after viewing a rich media ad than a non-rich media ad. Expect an increase in rich media as a means of customer acquisition.

Video becomes vital. Video, the newest format of rich media, may represent the "it" trend for the near future. According to Lee Westerfield, a media analyst at Harris Nesbitt, video is the fastest-growing major segment of Internet advertising, consuming dollars that likely would have been spent on traditional advertising. This format lets direct marketers engage consumers on an emotional level once reserved for television. And with broadband use rising, more Web sites support video content and more consumers view video content online.

The wireless wave. With consumers enjoying unplugged online access virtually anywhere, marketing is following suit. Advertisers now can serve ads over cell phones and other wireless devices, and consumers can phone in to make a purchase.

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