A Changing of the Online Advertising Guard

SYDNEY — The shift from dotcom advertisers to traditional advertisers in the online advertising industry reached a significant milestone recently. As the trend gains momentum, so does the confidence in the medium.

According to Nielsen//NetRatings’ AdSpectrum service, traditional companies occupied more than half of the top 100 advertisers for the month of March. Moreover, for the first time, traditional companies spent more ($US123.3 million) than Internet companies ($US104.8 million).

In putting together the data, Nielsen//NetRatings broadly defined three types of advertisers – traditional, technology and digital economy. In the digital economy group, Yahoo!, AOL Time Warner and Amazon.com were the top three advertisers respectively.

Of late, advertising in all forms of media has soured on the back of the global economic downturn. There is no doubt that this has temporarily stifled the growth of online advertising in absolute terms. What is encouraging however, is that larger enterprises are starting to move a significant allocation of their marketing budget online.

In some senses, online advertising will reach maturity when the mix of online advertisers mirrors that of other mediums like Television and Radio. Clearly the caveat to this statement is that any analysis should only compare online apples with offline ones (e.g. Yahoo! vs Channel 9).

The main driver for online advertising at present is clearly education. Put simply, many marketers and publishers don’t yet fully understand the Internet as a marketing medium. That said, there is no shame or malice in the statement, but rather recognition that the commercial Internet is still immature.

A comment that has stuck in my mind was recently made by David Jones (MD, Euro RSCG). Speaking on the culture of online advertising, Jones said that “one of the good things about the crash and the tough times is that it’s actually now acceptable to say ‘I don’t know’. There was a lot of people posturing that they did know, it made it very difficult for people to say actually I don’t know, let’s go and find out.”

In a similar vein, we have seen online publishers experiment and offer a willingness to compromise with advertiser demands. Through new creative specifications and a fresh approach to web design and layout, there is a clear recognition that there is room for improvement.

Not only that, but the fast changing nature of technology means that new functionality and consequently new opportunities are constantly arising. Sure there is a mismatch of timing between evangelism and delivery date, however many of the promises of years gone by are starting to be delivered.

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