Shake-up IS a term increasingly being used to describe the current state of affairs in online advertising. From my vantage point, however, this seems a bit understated. There does not seem to be another industry that has undergone such an intense period of growth and innovation with literally hundreds of startups touting game-changing technology and attracting the attention of industry behemoths.
In just the past year alone, Google, Yahoo, Microsoft and AOL have all made multi-billion dollar ad network purchases gearing up for what all industry observers agree will be a major growth market for a long time to come.
In addition, media is becoming increasingly digital with traditional print and radio advertising budgets going online at an ever-increasing rate. With so much advertising money shifting from one medium to another, and given the ever-changing nature of digital media, it’s not hard to understand why the industry is in the grip of such an enormous upheaval. Throw in social networking, conversational marketing, sponsored online communities and widget advertising into the mix, and you’ve got one seriously active landscape.
The emergence of Web marketing
As incredible as today’s online advertising functionality is when compared to old-school print, radio and TV buys, it suffers from some fundamental shortcomings.
Originally there was display advertising to promote brand awareness online, known as brand advertising. This meant buying enough impressions on Web sites so enough consumers saw the banner ads when they browsed the Web sites. This was, and continues to be, an effective means of delivering brand advertising across appropriate Web publications.
Next, there was the introduction of performance or pay-per-click advertising, whereby advertisers paid Web sites only when their visitors clicked on the ads to take a desired action such as a purchase or a signup.
This proved to be very effective in selling products and services especially if the visitor was in the decision-making or the buying stage of the purchase cycle.
While both are successful for their intended use, they still lack something fundamental – the ability to engage the consumer at all stages of the purchase cycle.
For example, suppose your TV is about five years old and works really well. However, with high-definition catching on and your friends talking about 1080i versus 1080p, digital light processing (DLP) versus Plasma versus LCD, you are feeling the need to join the digital revolution.
With this new awareness, you are noticing the dizzying array of choices among HDTVs shown in the display ads from different brands and retailers. Clearly an advertiser’s only hope is that you are already in the buying stage of the purchase cycle when you come across these types of banner ads.
What if an advertiser was able to target the consumer with a combination of brand creative and specific product offers based on the particular stage that the consumer happens to be in at the moment?
By combining brand and performance advertising, and by employing appropriate behavioral targeting techniques, the advertiser could dynamically change the ad’s content, thereby accelerating the consumer’s progression along the arch of the purchase cycle.
Using HDTVs as an example, this combined brand/performance campaign may even show a specific model and invite the buyer to find a retailer that carries that TV. In this way, the advertiser can help guide the consumer through the entire process from awareness to action, producing a better advertising ROI for the advertiser and the publisher than before.
Being able to engage the audience at all times with the appropriate offer is the Holy Grail of online advertising. An ad solution that can dynamically deliver this experience to the consumer is likely to deliver far greater value than the two dominant options in use today.
We’re getting there. This may be the next evolution in online advertising, but certainly not the last.