Being in the online advertising market for over 10 years, it is evident that there are a big changes happening. Last month at the most recent ad:tech in New York all the talk was around the need for ‘new’ online advertising products. Video on the web took center stage. In fact, the biggest elephant in the room was the horrid nature of pre-roll video in today’s web video content market. Everyone was just shrugging their shoulders, “Yeah we know it (pre-roll video) is ineffective and produces a poor user experience, but there is nothing else available”. This was the general sentiment among top advertisers and online media vendors such as Ogilvy, GM/Planworks, Fox, P&G, YouTube, NBC, etc.

New Models Coming

The public secret today in online advertising is that PPC based advertising is saturated. Banners are sliding into the land of irrelevance. As more and more online advertising dollars flood into the online sector, new advertising media will capture most of the revenue. What will the new advertising media be? It will be in the form of “Vertical Media” and “Social Media”. We are already seeing a flourish of vertical ad networks developing. Social networks are where the most exciting and relevant digital advertising solutions are developing. Social networks have unique micro-targeting capability and amazing behavioral measurement capability. The big question is, “What is the ad unit?” It’s targeted Microcontent. The growth in microtargeting networks is outpacing the inventory of Microcontent. There isn’t enough inventory of Microcontent ads. This is causing huge dissatisfaction among microtargeted community users who are jammed with irrelevant video ads.

New Viable Solutions

Podcasting, micro-video ads, long form video advertising, and other forms of contextual and behavioral advertising will emerge as the viable and scalable solutions. Advertisers love using podcasting and video ads. Believe it or not, users love them too. Microcontent is excellent ‘microcreative’ content that serves users in these new ‘microtargeted’ communities. Curt Hecht, executive vice president and chief digital officer of Starcom MediaVest and GM Planworks, confirmed this at ad:tech last month during his keynote session. Expect the big marketers to use social and vertical media to deliver entertainment, information, and call to action with ‘microcontent’. This will be a big monetization area for publishers, podcasters, and agencies. Downloadable media and online environments like podcasting, virtual worlds, blogs, and social networks will benefit the most. Expect proven methodologies and implementations around measurement to emerge. With that, we will see the scalable measurement solutions that value relevance of the audience. This is being addressed by entrepreneurs and members of the ADM. With all the measurement and new offerings, expect to see solid advertising ROI models in 2008.

Catalyst ?

The big catalyst is money. Too much money is coming into the sector for these solutions now. The combination of ‘microcontent’ and ‘microtargeted’ social network technology (APIs) will be a big driver to transition to the new ad models. I can’t wait to see which big advertisers lead this trend.