The New Online Advertising Ecosystem

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As a tumultuous year nears its end, online advertising heavyweights are coming together in a mix of conferences -- from Ad Revenue 2009, PubMatic's conference earlier in the month, to OMMA AdNets and ad:tech NY next week. They are all discussing the new online advertising ecosystem and what's ahead in 2010.

The theme of our conference, the complex growth of the 2nd channel of non-guaranteed inventory sold through intermediaries, is becoming a common and critical part of the premium publisher's ad revenue strategy. New buzzwords, conflicting opinions, and an underlying sense of optimism are rampant at these conferences. Here are my takeaways from Ad Revenue 2009, which seem to be resonating in the industry as a whole:

Innovation: The online advertising ecosystem has changed a lot in the past few years. New segments that didn't exist in 2005 now offer the promise of real-time bidding, intend based targeting, audience segmentation, and the opportunity to leverage data across several platforms and sources for a single media buy. These new technologies are key to solving some of biggest issues that advertisers struggle with the most when trying to pinpoint and audience online.

The shift towards buy-side optimization platforms: One new segment in particular, the media buying platforms such as MediaMath, Turn, VivaKi Nerve Center, and others, are allowing agencies to have easier access to better performing campaigns. This new segment, which first appeared within the past two years offers the biggest potential yet for opening up the flood gates of ad dollars to go online from offline by putting the power directly in the hands of the big media agencies.

Ad pricing is recovering: We've seen online ad pricing for premium publishers increase 32% since this time last year. Because 2008 was a one the most challenging years on record for online publisher ad revenue, this forced more advertisers to go online than any other year to date in order to get the most value for their dollar.

Real-time bidding is the new black: Media buying is changing as a result of real-time bidding capabilities that are in the process of being scaled up across the industry.

It's all about the data: Data has the potential to be both a significant source of revenue as well as a "slippery slope," as was pointed out by Huffington Post CEO, Eric Hippeau. One thing is certain: panelists made clear that if you don't have a data strategy, you better get one.

Ad networks will continue to have positive brand impact: Ad Networks can be effective for branding oriented marketing campaigns. Ad Networks today rival single publisher sites in reach (70%+ reach for each of the top 10 Ad Networks versus only 2 publisher sites above 58% reach).

End-users, brands and revenue streams: How do online publishers prioritize their end-users, brands and revenue streams? This was one question posed by Joe Mandese to TV Guide, BBC, BizJournals, and the IAB -- to which there was no clear outcome, and even more conflicting opinions.

I'm excited about the prospects of 2010. We are clearly getting to a point where there are better products and innovations in the market for the buyers, sellers and intermediaries that operate in it.

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