NEW YORK — You’ve come a long way, baby. But there’s still a long way yet to go.
That was the sentiment here today at the ad:tech New York 2007 conference, where online advertising insiders struck a tone of optimism that landed somewhere between cautious and exuberant. At the same time, speakers agreed that Web ads are beginning to live up to their promise of redefining the advertiser-consumer relationship — even if they’re not sure exactly what the new definition will be.
Randall Rothenberg, president and CEO of the Interactive Advertising Bureau (IAB), trumpeted the online ad space’s strong and growing condition during the opening “State of the Industry” keynote panel. He cited an IAB/Pricewaterhouse Coopers study that projected online ad spending may reach nearly $20 billion this year.
Yet Rothenberg also warned of the “specter of regulation,” referring to the possibility that the FTC could restrict the collection and usage of cookies.
“They’re trying to regulate you right out of business,” he cautioned, advising the audience to “watch Washington, watch the state capitals, [and] watch what’s going on around you.”
The panelists at that opening session, representing advertisers, agencies and media outlets, agreed that such concerns make it critical for the industry to ensure that consumers understand the distinction between cookies and spyware.
Despite the scrutiny over cookie policies, panelists said ensuring their survival will help address the biggest complaint facing online marketers: a lack of ad relevance. Without the tracking information being provided by cookies, they said, it’s far more difficult to deliver ads that may actually be useful to consumers.
“Why, if I’m married, am I still seeing ads for singles?” said Michael Barrett, executive vice president and chief revenue officer at Fox Interactive Media. “Cookies are anonymous ways to give insight into [people’s] preferences.”
However, he added that it is critical for online media companies to offer an opt-out mechanism to ensure consumers’ trust.
Retaining consumer trust, other industry figures added, is key in the competition for eyeballs as users grow ever more media-savvy. Increasingly, panelists said, victory will go to marketers who shed the stigma of traditional offline ad models, replacing them with commercial content that consumers feel comfortable enjoying, embracing and sharing with friends.
That’s become the chief model advertisers now use to take advantage of user-generated content sites like YouTube and social networking sites like Facebook and MySpace — what panelists dubbed the “participatory Web.”
These emerging content plays, panelists said, afford advertisers the opportunity to insert themselves into conversations among friends, recruiting consumers to re-transmit their messages in the process.
Consequently, how best to monetize the booming social networking space has emerged as a white-hot question, as evidenced by the much-hyped buildup to yesterday’s unveiling of Facebook’s new advertising platform.
No other session at ad:tech more dramatically illustrated the benefits of recruiting consumers as marketing partners than the afternoon panel titled, “Social Media and Consumer Generated Content: Has a Value Proposition Emerged?” During that session, speakers from YouTube, Fox Interactive Media, Coca-Cola and interactive agency Digitas took turns highlighting the burgeoning success of campaigns that tapped into user-generated content and content-sharing on social networks.
Heinz’s “Top This” YouTube campaign proved a striking example of recruiting in the participatory Web, where some 8,000 users submitted self-made videos featuring Heinz ketchup. Of those, almost 4,000 were of sufficient production quality to make it to the Web.
Despite the great potential for marketers operating in the participatory Web ecosystem, speakers at that session agreed that advertisers must partner with their audience openly — rather than try to trick them.
“Marketers can’t afford to be insincere,” said Jonathan Adams, vice president and media director at Digitas. That’s largely because the social networking crowd is a savvy consumer base, panelists said. While they will eagerly embrace brands that speak their language, today’s online consumers will just as quickly reject those that come off as phony.
Panelists also urged advertisers to understand social networking users’ different levels of receptiveness to marketing messages: Some consumers may actively embrace tools to trick out a MySpace page in a Cherry Coke motif, while others will limit their involvement to “friending” a brand, if that.
Unresolved Questions and Concerns
But as advertisers’ attention turns toward wooing consumers to spread their message, there may be a darker change afoot for the traditional media buying and planning shops. Panelists said media buyers could suffer as a result of this disintermediation, as clients’ increasingly take their messages directly to consumers for redistribution.
Many other specifics surrounding the brave new world of online content also remain uncertain. For instance, panelists during the show’s introductory session mused that as recently as a year ago, the industry was debating the viability of online video. Today, video has over-delivered in terms of popularity, if anything. Yet the question persists of how to actually monetize it.
Some of the panelists expressed disdain for pre-roll ad spots, those 15-second or even 30-second spots that typically appear before the user can view video content — which is often not much longer than the advertisement.
Finally, despite the progress made in conceiving new ways to reach and engage consumers, one perennial bugbear continues to plague the online ad industry: how to measure advertising effectiveness, which was the subject of its own panel discussion.
After the scatter diagrams and frequency correlations had been hashed over, the surest advice that panelists could muster for the audience was that at this early stage, it still doesn’t much matter which metric marketers use — just as long as they’re using one.
The situation becomes even more complex when trying to improve user engagement with commercial content. Sandy Eubank, U.S. director of research, analytics, and insights at OMD, said consumers’ engagement depends on their relationship to the brand, the media that delivers the message, and the creative itself.
