Outlook: Customer-Centric Media Buying Becomes the Norm

It has been interesting, if not trying at times, being in the online media business since 1994. I remember being exposed to and then selling advertising on Prodigy in 1994 when I worked at Cox Enterprises. As clunky and slow as things were then, it was easy to see that consumers would embrace the Web and that advertiser applications were almost limitless.

In 2006, it’s increasingly easy to discern how things will come together this year. The biggest change will be advertisers’ leap to a whole view of buying the online medium and how to move seamlessly among different forms of advertising, taking a customer-centric and not a media channel-centric approach. This is where I’ve observed the greatest effort and progress by advertisers. At LookSmart it has helped us determine what to offer our advertisers along with how to offer it. Advertisers are very adaptable in finding and following customers.

In 1980, advertisers could look at media channels as distinct entities. They bought network television for reach, spot TV for regional considerations and viewed each as a communications channel through which a message was pushed.

The assumption was that if they got the message right for the channel, it would have an effect with the audience.

This is still true enough today. Yet the online medium now provides the ability to watch consumers or prospects and serve them an ad, or series of ads, that matches the site they are on and in response to other ads they have seen. This is the watershed event that the online medium provides. Advertisers have made sophisticated strides at moving from a channel approach toward a customer approach.

With this in mind, we can look forward to the following in 2006:

· The online medium, because of its ability to track and convert consumers to buyers, will continue to take money from other media. One by one, we have seen budget move from other media to online. This is sure to continue, at higher growth rates.

· Advertisers will continue to develop increasingly efficient and effective methods to track consumer behavior online and will use increasingly effective copy changes depending on where they encounter a customer or prospect. Simply put, advertisers will be able to measure what they already know. People go to different places based on where they are in a sales funnel. The message should be adjusted accordingly to maximize acquisition.

· With this increased effectiveness and bigger budget entering the system, advertisers will buy deeper than just a handful of sites and networks. I have made a living selling audience to advertisers – they will find an efficient method to buy very deep into a high-demand medium.

· All of the above will begin to fractionalize the online medium. Publishers will provide increased ability to target audiences. They will provide new services to the audience and better tools to the advertising customer to augment what the advertiser already uses. New services by existing companies, as well as new ones, will proliferate. This will increase consumer use and advertising spending against the new choices. This is where the business gets really interesting.

Consumers will benefit from new services designed to make information easier to find. Advertisers will benefit from being able to – with increased precision – message customers and prospects based on a cross-section of their internal data with the publisher’s. Publishers will innovate with content and tools designed to increase usage and engagement of the audience.

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