Overall, the mood was much more subdued relative to 2007, which was only to be expected considering that last year, everyone was still absorbing the mind boggling checks that Google and MSFT wrote for DoubleClick and aQuantive. More broadly, here are some takeaways for me.
Top of mind for everyone was what will happen to the on-line ad spend over the next 12 months. Opinion varied from the nuclear winter of 2001 is back to business as usual, i.e. on-line spend will growth at 15-25%. I think (for what its worth) that the answer is in between. Over the next 12 months, the growth rate will slow down to 5-10 % with search at the higher end of that range and display at the lower end. A key driver of this is the fact that verticals like financial services and automotive that are large spenders are in crisis, and are likely to cut spend across the board vs. in a measured way. At the same time, tit is just a breather and the secular trend continues to be robust. On-line spend is still just around 5 % while the web accounts for 33% of all media consumption, and probably much higher for the prized 18-35 demographic. There is a silver lining. The slowdown will force advertisers to take a hard look at their ad spend and that introspection may even result in accelerated growth rates in 2010. For now, batten down the hatches and wait for the storm to pass!
The emergence of hybrid Brand-Response advertising. There are several drivers of this trend:
Brand marketers that are traditionally focused on building awareness are starting to move down the funnel as they become more comfortable with the on-line medium, and recognize the power of interactivity and measurability. Off-course budget pressures have also helped!
There is increasing recognition of the over-emphasis by most performance marketers on the “last click” before conversion. The Microsoft propaganda around engagement mapping and similar studies by comScore and Yahoo are helping drive awareness of the issue
The growth and increasing sophistication of behavioral targeting coupled with the availability of dynamically constructed display ad units (i.e. widget ads) is enabling both brand and performance advertisers to achieve multiple objectives cost effectively. For more details on this, read my earlier posts on Display 3.0
Cross media optimization is back in fashion. With premium publishers packaging multiple media types in a bundle (e.g. TV and on-line video), the pressure to improve “ROI” and increasing focus on attributing value to various steps in the purchase funnel, both advertisers and publishers need help with cross media optimization. And vendors with new algorithms and armies of consultants are jumping into the fray to meet the demand. The million $ question is whether there is a more automated solution out there ? One that integrate with the media buying tool sets and therefore helps in making the trade-off on a day to day basis vs. providing a snapshot that is interesting but not actionable. If you have seen or heard of such a solution, do let me know
What do you think ?