TechMediaTalk

Brand Advertising on the Internet – Is Old New Again?

Posted on | February 9, 2009

In a previous post here, I wrote about the importance of knowing who your audience is for online video inicon_picture-50424 order to optimize advertising opportunities.  Last week I had the opportunity to attend the AlwaysOn OnMedia NYC conference in New York City.  A couple of recently venture backed companies were interesting in that looking at them one may say that old is new again, or that Internet advertising may look at traditional advertising for inspiration rather than differentiation.  

The distinction here is between brand advertising and direct response, search and other advertising that have been the torch bearers for the transformational effect of the Internet on advertising.  I thought it was interesting to hear this from industry insiders, as my previous post was based on insights as a marketer not as an advertising industry insider.

Short Tail Media and Brand.net

The two companies I refer to are: ShortTail Media and Brand.net.  ShortTail Media’s name should give away the premise of these two companies given the popularity of ‘Long Tail’ as the definitive nomenclature for the power of the Internet.

Both these companies are focused on brand advertising.  According to Blair, metrics attached to Internet advertising are not suitable for brand advertising – implying that click throughs or even impressions by themselves are not a good measure of a brand-ad’s effectiveness on the Internet.  According to her, the value that companies like Brand.net and ShortTail Media bring to brand advertisers is that they eliminate the need for ad networks that commoditize advertising. 

Both companies are funded on this business model, and brand advertisers seem to be responding.  Brand.net claims 50 campaigns since May 2008 with 60% of their revenue coming from the top 15 advertising spenders in the US.  Surely the founders and VC’s behind the ventures know something, so it will be interesting to see how their businesses evolve.

Whether this is a result of technology limitations or the fundamental nature of advertising, it stands to reason that brand advertising is not going to be transformed overnight.  Some of the reasons outside of stated goals of brand advertising (brand development as opposed to direct response creation) seem to be the structure of the industry from an ad sales standpoint and technology limitations.  The bloom has been off banner and display ads for some time.  In fact, the question was even asked – whether display ads would disappear entirely?

Internet advertising is one of the most dynamic areas of the Internet in terms of new innovation, investment and growth opportunities.  With the rapid growth in Internet advertising, and the tremendous opportunities for advertising to be transformed as a result of the Internet, it is not surprising that opportunities in Internet advertising remain bright.  It should also not be surprising that that there are more than 400 ad networks, or that over the last couple of years large acquisitions have been done by the likes of Microsoft and Google.  Venture investment in advertising continues, and with geo location and wireless connectivity becoming prevalent (for example, GPS enabled cell phones and Wi-Fi hot spots), local advertising is ripe for transformation also.

At the same time, the capabilities of online advertising, with the exception of perhaps search advertising, are dwarfed by the expectations and potential of such advertising.  When people suggest that Internet advertising is changing the face of the advertising industry, they are invariably referring to search and direct response advertising.  According to Blair, while 40% of direct response advertising has migrated to the Internet, less than 5% of brand advertising has done so.  Ask brand advertisers about Internet advertising, and while more money is being poured into it, for most part, it is still considered experimental budgets.

What does this mean for Online Video Advertising?

Surely a similar discussion of another form of brand advertising – namely video advertising – which also happens to be the fastest growing form of Internet advertising is not far behind. Then I come across this article on the web with a little factoid:

For example, Hulu and Break.com have attracted the coveted younger male with spending-power demographic. These very successful digital video publishers sell audience just as the cable networks do.

At least for the moment it seems that a demographic assessment of whose watching online video remains relevant to advertisers as discussed here.

What do you think?  Start a discussion below.

 

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Category: Advertising

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