MediaFile

Cutting through the clutter at OPA’s Global Forum

May 15, 2008

The economy might be in trouble but advertisers and publishers at the Online Publisher Association’s Forum for the Future were still upbeat today about the prospects for online advertising.

“The first thing people need to do is to decaffeinate some of those expectations (about the economic outlook),” Rapt CEO Tom Chavez said during a State of Advertising panel discussion at the OPA’s meeting in London.

As more people move online, the market will grow despite economic doldrums. Carline Little, CEO of Washingtonpost.Newsweek Interactive conceded a “recession is going to hit any advertising-supported media but as people move online, we’ll see increases – but not as big as we saw four or five years ago. ”

eMarketer founder Geoff Ramsey helped cut through the clutter of conflicting statistics about key trends in online advertising, social networking and virtual worlds.

Video advertising is likely to grab the lion’s share of online advertising in the future, he said. Marketers are already starting to shift their budgets to video, which could reach $2.5bn by 2012 in the US alone. Some publishers said increasing video advertising was their number one priority for 2008, although a straw poll around the conference room in London did not show a large number of hands among the audience of around 200.

Combining online video with behavioural targeting is one key strategy, as long as you stay in the real world. Second Life, Ramsay said, is not a “mass-reach vehicle.” Out of its 13 million residents, only 877,000 use the site every month and most corporate locations attract less than 500 visitors a day.

Britain leads the pack when it comes to spending on online advertising – the spend per head is $143.48 compared to $112.17 in the United States, Ramsey pointed out. China, with the world’s biggest Internet population, is at just over $5 for now.

But, advertisers have to work harder to gain their audience’s trust. Trust in the industry has fallen to 17 percent of consumers in 2007 from 25 percent in 2005, behind the legal industry and only slightly ahead of tobacco, according to research from DoubleClick.

When consumers were asked how much they trusted specific types of advertising, mobile ads scored the lowest at 18 percent, followed by banner ads at 26 percent, search at 34 percent, and TV and magazines at 56 percent. But hearing about products through friends and family was most trusted at 78 percent.

One way of exploiting such data is to focus increasingly on advertising on social networks, such as Facebook , where users provide valuable information about themselves for advertisers. But that poses its own challenges. Data from the U.S. showed that 54 percent of social network users said they never click on an ad and 80 percent said they would not add a brand as a friend.

Ramsey pinpointed the trends that are likely to shape the outlook for e-marketers:

  • Google will do with phones what they did to the Web, “no question about it.”
  • As consumers use of mobile devices rise, marketers will need to look for cross-media properties that allow consumers to interact with brands, while on the go.
  • Search is not as big as we might think. How do people think of what to search for? Think brands, not search, stupid.

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