Avenue A releases 2008 outlook report

Avenue A/Razorfish released its 2008 digital outlook report last week, which found, among other things, that digital marketing is growing, especially in the social media space.

The report found Razorfish’s media billings in 2007 to be $735 million, up 36% from 2006. This spend was distrib­uted across 1,832 Web sites, more than double the 863 properties that the firm purchased media on in 2006. Of these sites, search represented 31%, verticals 39%, ad networks 11% and portals 19%. This represented a shift spending away from portals to vertical properties and search engines, with a growth in spending on entertainment based Web sites includ­ing gaming sites, video sharing sites and social networks.

“The role of digital technology is becoming transformational in the way that businesses are communicating with their customers,” said Greg Pomaro, VP of media at Avenue A/Razorfish Seattle.

As consumer behavior shifts more towards digital technologies, the report expects these budgets to continue to change, and expects this to be a year for mergers and acquisitions. Other predic­tions included that marketers should “move beyond the media buy” and look to other channels including widgets, social networks, videos and mobile.

“The advent of new widgets within social networks is going to have a huge impact on how people do business digi­tally,” Pomaro added. “The idea of a homepage is evolving.”

The report also expects analytics to play a big role in the next year.

“We are going to see a rapid escalation in the types of measurement that we have so that we can capture as directly as possible the client’s relationship with their customers and how this translates to sales,” Pomero predicted.

The report expects a slowing of ad net­work acquisition, because ad spending is concentrated with the largest players. According to the report, custom attribu­tion research improves performance in ad network efficiency by matching the right advertiser to the right placement. The likelihood of being able to do so increases as a network increases its ad inventory and number of advertisers, meaning that bigger is better.

When it comes to mobile, the report says that it expects mobile to continue to grow technologically, but not necessarily from an advertising point of view.

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