TV aside, it is online ads that need to shape up

Internet advertising spend may have overtaken that of television, but much of it slavishly follows a format dictated by old technology

Banners and online video are examples of using the internet to deliver old, familiar types of advertising. But why rely on them when search is only possible online?

What does this mean for online display? Are its current struggles simply a combination of the economic downturn and of TV advertising rates being at their cheapest for 20 years? Will continuing growth in online video turn around its fortunes, or will this come to be seen as a novelty too?

These questions matter not just to marketers looking for guidance on where to spend their ad display advertising needs to work better and can be made to do so.

The key elements of this improvement are targeting and measurement, and work continues in both those areas. The recent news that Procter & Gamble was looking to pay media owners on the basis of consumer engagement rather than on a traditional cost per thousand impressions (CPM) is a step across the divide between bringing old formats online and using the unique properties of the interactive medium. In an extension of the same technology that allows behavioural targeting, P&G says it will pay more for users who go beyond viewing ads to sign up for newsletters, play games or watch videos.

However, this technology hinges on the willingness of consumers to be tracked, and on the willingness of politicians to allow it. Yet whether this will occur is still far from certain. On top of that is the question of cost – of how much more advertisers are willing to pay to create the extra ads required for targeting to matter.

So while it looks as if online display can mature into using the unique properties of the digital age, it will take considerable political and educational efforts from the industry, not least from the IAB, for it to do so.

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