Stemato.com - Stephen Tompkins’ Blog

Police use fingerprints, DNA and other clues to assist in tracking down the perpetrators of crimes. Doctors use journals, colleagues, and workshops to successfully treat patients. Farmers use weather history, soil conditions and water to determine the future crops. Every occupation has its tool set and the more we evolve the more our tools for success become diverse and varied and online marketing is no different.

With this in mind, I started to think about the current model for online display ads. Where will it evolve? How will the tools effect the future? One thing is certain, if publishers continue to flood the market with a glut of inventory and continue this inflationary effect. CPM’s will continue to plummet. And publishers will fight for pageviews (probably the wrong success metric) in an overcrowded market.

CPM’s are plummeting and clients are demanding better ROI; online advertising has reached an important crossroads. The questions on everyone’s minds are. Will it face similar struggles as offline ads or will it adapt and reach its full potential? The answer to me is the whole model is broken.

Here are a few areas I think should first be examined:

#1 - Ad positioning on the page - Currently, ads seem to populate the side margins and boxes within the content, continuing to fight a losing battle with the content. Search ads were able to differ from display because they match intent with ads. If display could re-engineer its thought to match intent with content they could improve performance.

#2 - Networks/inventory - Networks need to become more transparent and let marketers know when and where they are placing ads. They also need to consider a body that can determine standards on volume and pricing similar to the IAB’s ad size standards.

#3-Targeting tools - Publisher-side targeting tools need to be greatly improved to help marketers reach the right person on the right page in the right spot. How many times do you see ads not matching the content, demographic and user? If pubs could come up with “smart-techonology” that identified layout, navigational flow and content they could better place the right ad in the right spot.

By introducing some of the above changes to the online world you would better improve the experience and performance of your media.  Can you think of some others changes that could improve the online-advertising model?

Wed 3-11

As part of my Mid-Year Commitments and Career Review at Microsoft, I decided I wanted to inform my colleagues on some of the industry news and company specific information that daily swims the internet. I also think it would be related to this blog and will post it here for your enjoyment.

Basically it is a list of some of the stories I read and look at daily about online marketing with a specific focus on the display ads and the Atlas Media Console from Microsoft Advertising.

Tues 3-11

News today from the IAB and Pricewatherhouse Coopers, suggest that Web ad sales dipped in the second quarter. Big surprise? Not at all considering the current state of the economy. I just read this article from Yahoo and the surprising thing to me is display and search’s stubborness in the face of a global economic slowdown.

It reports that both graphic (13% YoY) and search (24% YoY) ads showed strong growth in the second quarter. I think the real test will come in the third quarter when we see if these online ads can show further resiliance as the economy crumbles even further. My guess is search will be fine but display may show a slight slowdown.

I just read this interesting story from the NY Times about online ad spending and the economy. It basically says that display advertisement is down across the board and search remains strong. Its not super surprising to think that in a time of economic slowdown that search with its increased ability to track is weathering this storm well. But I am slightly caught off guard that display has had such significant declines in recent months.

The NY Times reported 16% growth this April compared to 20% last year making the slow down about 4% year-over-year. Not a major slowdown but still enough to be alarmed especially in a weakening market. Although its too early to declare an end to online advertisement’s growth, the companies that can better attribute steps in the online sales funnel to display, stand to gain a great competitive edge.