"Internet advertising revenues in the US set a new record of $16.9 billion in 2006, according to the Interactive Advertising Bureau/PricewaterhouseCoopers Internet Advertising Revenue Report. That’s a 35% gain over 2005, and the growth has continued this year: It hit another record of $4.9 billion for the first quarter of 2007, according to the most recent IAB/PWC report, a 26% increase over Q1 2006.
Photo credit: MarketingCharts - Nielsen/NetRatings-AdRelevance
In response, publishers increasingly are looking to ad-supported content as their primary revenue driver, adding more content outside their subscription barriers or doing away with premium content entirely.
Even The Wall Street Journal, one of the most successful subscription-based businesses on the Web, is reportedly debating whether to drop its premium model and become a fully ad-supported site following Rupert Murdoch’s purchase of the newspaper.
For all the excitement, though, the evolving market presents challenges for newcomers and experienced players alike.
Standards and best practices are in flux for emerging media like video and RSS. Blogs, social networking sites and other Web 2.0 features are competing with publishers for ad dollars and eyeballs. And traditional metrics and ad models are changing in response to Web users’ habits.
How can a publisher make the most of the opportunities?"
SUMMARY: The online advertising market has roared back to life after the dot-com boom and bust. To take advantage of this, publishers are adding more ad-supported content as well as looking at emerging media to engage their readers. But are any of these new formats working?
Last week, online publisher MarketingSherpa gathered a roundtable panel of five big players in the industry and asked them about current metrics and what they're testing with mobile, video, widgets and user generated content. While you can go and check out the Sherpa's official experts and their insight into the eight key questions they were confronted with, I have tried to answer the same questions myself without first looking at what the other interviewees had said. Though my competence level, experience and insight may not match the one of the experts that were originally called to answer these questions, my effort is in complementing their vision with whatever additional clues I have been able to capture from my non-mainstream, outside of the US, grassroots-inspired online publishing experience.
Here my answers to MarketingSherpa original eight questions:
1. Traditional Web metrics, such as page views and impressions, are becoming less relevant thanks to the rise of Flash, AJAX and other Web technologies. What metrics are you using that better indicate the full range of user interactions?
It is true that we advent of technologies like Ajax and Flash the relevance of individual page views has somewhat diminished, but there remain key valuable metrics that I keep looking at to have the pulse of my site health. Individual visitors remains a top indicator for me, as well as time on site, and access to specific offers, downloads or reports I specifically promote.
2. Publishers and advertisers are excited by video, games and other interactive content, but do the results justify that interest? Have you seen better clickthrough rates or other metrics for advertising around interactive content?
I don't think I have seen higher clickthroughs with advertising placed next to video content but I do appreciate the fact that some existing contextual advertising solution provide the means to serve semi-dynamic ads relevant to the content being shown. Take Chris Pirillo' Show in which by manually updating the title of his live video streaming page he triggers always relevant and appropriate Google ads for the topic he is covering at the moment. Interesting to say the least (SEO experts some say that refreshing a content page to get different AdSense ads display is against Google guidelines but in reality we see that, at least in the way Chris Pirillo is doing this, there should be nothing to fear).
I also expect contextual and highly relevant sponsorships and text ads can work well in conjunction with newsradars, widgets and other highly portable content. What I do not yet see is the integration of such advertising integration being offered to small and medium sized online publishers like me. I am not a programmer, and developing a software tool or plugin may be a bit beyond my present abilities. But provided with a widget creation tool, a mashup builder or a newsmastering engine why am I not ever offered with usable ways of integrating selected advertising or sponsorships into this content distribution tools?
3. Pre-roll advertising is the default technique with online video, but does pre-roll really make the most of online advertising’s interactive potential? Have you tried other ad formats that get a good response for video content?
I would steer very clear of pre-roll ads. They have all of the bad qualities you may want to avoid today when publishing and distributing valuable video content online. Pre-roll ads bother viewers, are annoying and create a negative resistance to the brand and to the channel that carry them.
There are several other interesting new video ad formats out there but I am yet to see anyone that does not distract me from my key focus. Post-roll ads are an interesting option when the integration is properly done and when the relevance is very high. Overlay ads on video tend to be quite distractive no matter how and where you place them.
I generally prefer relevant contextual ads associated and placed near the main video content, rather than wanting at all costs to intrude with the ads in the primary user experience.
I consider video as a great marketing and exposure-generating tool but this doesn't mean that we have to place advertising in it somewhere. Maybe the best application of video is not in carrying advertising but in carrying eyeballs and interest to your desired destination.
4. User-generated content is popular with consumers and a feature many publishers are using to increase interaction on their sites. Some advertisers are still wary about the quality of that content as a place to display ads. What strategies have you found to deal with concerns about the quality user-generated content?
I think that if you apply a moderate level of moderation and editorial review to user-generated content you can improve the overall quality of the content generated by a very significant amount. That means that if you help, guide, filter, select and aggregate user-generated content the potential for creating innovative content packages increases a great deal.
Left alone to contribute users may not always have the skills and editorial abilities you need them to have. But if you provide a backstage for them where to learn, study, practice, exchange and learn from each other there is no reason not to expect some good gems coming up your UGC pool. Help them, inform them, motivate them, reward them should be the mantra for successful UGC content breeders.
5. Widgets, XML, RSS and other technologies have made content more portable than ever. What strategies are you adopting to help generate revenue on content that publishers may not control on their own Web sites anymore?
Feeds and widgets can carry sponsorships, as well as advertising solutions. While we are still in the early stages of finding interesting and usable integrations of the two, the idea remains that highly portable content does not need to act always as a direct revenue generator.
Portable content solutions provide viral exposure and visibility and can bring lots of new traffic and eyeballs back "home" or wherever you may drive them to. It appears to me that, at least for now, the use of this portable content solutions as powerful traffic drivers and brand builders is more effective and in tune with what readers want than any other direct monetization effort I have seen. (I may be very wrong on this, but I have yet to see examples or numbers that tell me a different story. If you have them, please share them here in the Comments.)
6. The rise of blogs, social networking sites and other online content has led to an explosion of online ad inventory and a potential commoditization of the product. If you can’t compete on volume anymore, what tactics are you using to keep protect the value of your ad inventory or keep advertisers interested in your properties?
I always try to compete on quality and value. That applies to online advertising as well. The more relevant, complementary and non-intrusive my advertising solutions the greater the service benefit I will provide to my readers. This is why what I value the most from an online advertising agency is the still rare option of being able to personally select my advertisers. This is a right that I think all online publishers should exercise. If you can select and willfully endorse specific advertisers because you truly know and appreciate their products aren't you offering a much more useful information service to your users?
There are also some highly innovative solutions that take the guessing out fo the online advertising formula by deciding in real-time for you what is the advertising solution that monetizes the most for each one of your viewers and pages. One of these is RMX-Media but there are other interesting solutions peeking into this space.
7. What strategies have you adopted to incorporate mobile in the online advertising mix, and what advertising tactics are delivering the best results?
There are a number of emerging services that not only can convert your site into something that can be instantly viewed on mobile phones but they also take care of integrating contextual or interruptive ads inside them and of sharing the ensuing revenues with you.
It's too early for me to say what approach works better in these situations but I would expect that site sponsorships and highly relevant contextual ads placed in non-interruptive fashion, but rather clearly grouped and clustered by topics/themes could provide an increased use of advertising information by users.
On the run users want to have rapid responses to their information needs and ads should not get in the way of making users primary need effective. Over-time, excessive intrusive advertising may easily motivate many of them to switch over to paid subscription services which for very small monthly amounts would provide the very same kind service ads-free.
8. Looking back over the past six-12 months, is there a particular tactic or model that’s worked especially well for you or a tip you have for publishers and advertisers interested in the online ad market?
The tactic that has worked well for me over and over again has been focusing on quality and not trying to be a smartass. Going in-depth, taking the extra time to provide higher quality content, research, imagery has always paid back in one way or another.
One particular tactic that works wonders is helping people make sense of something and provide them with all the info, tools and resources they need to empower themselves in whatever they are after. When you do that your page, article, report becomes a reference and with it everything that goes with it: sponsors, ads, tips, suggested references, books, related tools and more.
When most everyone is concerned about shooting out tons of "latest stories", "breaking news", big in numbers but very shallow in content value, you have a wide open opportunity to focus exactly where most everyone else is not looking: making sense of it all.
The original Marketing Sherpa expert panelists:
o Craig Ettinger, Director, Sales & Business Development, TIME.com
o Pam Horan, President, Online Publishers Association
o Kyoo Kim, VP Sales, MSNBC.com
o Lance Podell, CEO, Seevast, which operates the Pulse 360 sponsored-link advertising network
o Patrick Moorhouse, National Manager Research and Development, Avenue A/Razorfish
and their original opinions:
Online Advertising Roundtable: 5 Experts Answer Sherpa's Top 8 Questions on New Tactics to Seize the Booming Market - September 7th, 2007
MarketingSherpa researches what works in marketing via exclusive Case Studies, surveys, results data analysis and lab tests. MarketingSherpa publishes what it learns so that its 237,000 weekly readers can improve their results and train their teams.
Original article written by Robin Good for Master New Media and entitled: "Online Advertising: New Tactics, Metrics And Strategies To Increase Revenues And Traffic"