The Future of Advertising

7 09 2010

In previous blogs I have shared some of the research that shows that Social Media Marketing spend is projected to increase, often at the expense of traditional marketing methods.

Since then, I have run across the interesting news that the ad click-through rate has fallen in half in the last two years. (Source: comScore)

  • 32% click-through rate in July 2007
  • 16% click-through rate in March 2009

That should not be too surprising.  As users get more comfortable with technology, they develop personal skills and technologies to block out intrusive advertising.

So, advertising spending is moving away from traditional media, and moving more towards Internet and online advertising.  At the same time we know that click-through rates on ads are falling.  The conclusion is:

  • Ads need to be contextually relevant and helpful or entertaining to readers
  • Traditional, intrusive advertising will be less and less effective
  • You will also need to look at where you are advertising

The other big shift that we are seeing in advertising higher growth in display advertising and lower growth in search advertising. (Source: comScore)

  • Search Advertising was $2.9 billion in 2009, but grew at 4%
  • Display Advertising was $2.3 billion and grew at +15%
  • Some of the hot areas in Display Advertising include:
    • Banner Ads +8%
    • Video Ads + 48%

Some of the recent news in the industry reflects this data:

  • YouTube is using their ContentID technology to identify copyrighted content on their site, but rather than removing it, they are placing relevant ads with the content.  Full Article.
  • Yahoo! Has changed its strategic focus away from search and search ads to focus more on content and display ads.  The idea being to make the ads more effective by making them contextually relevant.  Full Article.

Where is online advertising heading from here?  Here are two examples of hot areas:

  • Ads within Social Media. Facebook has ads and Twitter is expected to follow in the reasonably near future.
  • Ads in mobile apps.  One the coolest and most useful examples I have seen is the information I have seen in the augmented reality apps.  These are presented as useful information about the physical locations around your present position.

The bottom line is, no matter where you place the ad, it has to be contextually-relevant, helpful and/or entertaining or your audience will just tune you out.  (Or some clever hacker will built a way to block your message.)

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