Consolidation Brings Solutions

In the past, online advertising networks specialized in offering only e-mail, banner or other advertising within their networks. Because the industry was fragmented, a one-stop shop to obtain all your online advertising needs was nonexistent.

Let’s take a look at the present consolidation, the future of online advertising and how you can take advantage of the consolidation and integration right now.

Why are online networks consolidating? Large ad networks fear being surpassed by smaller networks, which are more technologically advanced and offer a wide range of advertising products, as well as integrated advertising solutions. This fear is spurring consolidation and integration. As consolidation takes place, you can look forward to better advertising solutions, return on investment, branding, optimization, customization, customer relationship management opportunities and reporting.

There are more than 130 million individuals with Internet access in the United States and close to 300 million worldwide. Compare the growth of the Internet audience with radio and television. While it took radio 38 years to amass an audience of 50 million listeners and television 13 years to reach 50 million viewers, it took the Internet only four years to amass an audience of 50 million.

However, because of the fast growth of the Internet, sales teams generally have specialized in selling only one product: banners, e-mails or interstitials, regardless of client objectives. Unfortunately, one product does not fit all, and these larger ad networks could not sell you a combination of online advertising solutions. Keeping up with the hypergrowth of the Internet and ad networks has made consolidation necessary.

How exactly is the industry consolidating? CMGI, which owns a significant stake of Engage, bought Flycast, AdKnowledge and Adsmart, each of which offered a range of advertising solutions and have now been, or are being, merged into one.

Take DoubleClick’s recent purchase of NetCreations and @plan as an example of consolidation and integration. In the past, DoubleClick offered only banner advertising. However, DoubleClick’s aspiration to be a player in the e-mail marketing and Internet research worlds led to the NetCreations and @plan acquisitions, respectively.

What are the ramifications of the consolidation? Thankfully, the days of selling only one Internet advertising product are numbered. This is witnessed by the growth of smaller, boutique online ad networks that house advertising consultants specializing in working with clients to determine goals and objectives, then creating a mix of advertising solutions to meet those goals. Now this approach is coming to large online ad networks.

What does this mean for you? Now that consolidation is taking place, watch for two major advances. First, multiple advertising solutions will be available from each ad network, allowing advertisers to purchase their product of choice from one source. Second, and more important, integrated advertising solutions will finally be available from the large ad networks. Currently, only smaller, boutique ad networks offer integrated advertising solutions, but within six to 12 months, larger ad networks should have them available as well.

Integrated advertising solutions are the future of Internet advertising. As an example, you can now buy e-mail and banner advertising, among other advertising products, but integrated advertising allows you to send an e-mail advertising your product or service to the same individual who viewed a banner advertisement offering your product or service or simply branding your name. This particular integrated advertising solution can result in response rates of up to 300 percent greater than e-mail alone.

Integrated advertising solutions provide the ability to direct market, brand, rebrand, create relationships, instill customer loyalty, analyze reports, learn from the results and create more effective future advertising campaigns.

Take advantage of companies that can meet your advertising goals and objectives now, and keep an eye on larger companies that are consolidating, so you can use them when they have the ability to meet your needs.

Remember, some of the newer advertising networks already offer integrated advertising solutions. So, when evaluating whether an online advertising network will be able to achieve the best direct marketing response and most effective, efficient branding, ask: “Can you send an e-mail to the same person who just viewed my banner?” If the answer is no, then it is incapable of providing you with an integrated advertising solution. Don’t discount that network completely, though. Just keep it in the back of your mind.

For larger advertising networks that are just now consolidating, look for them to provide integrated advertising solutions in the next six to 12 months. In the interim, seek out the newer advertising networks that already offer integrated advertising solutions. The future is here — embrace it.

• Brian Longest is president/CEO of UtopiAd, Reston, VA. Reach him at [email protected]

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