Online Display Ad Market Continues Shift To 'Audience' From 'Media' Sales
- by Joe Mandese @mp_joemandese, November 18, 2009
"With more publishers tapping into yield management and optimization technology, the race to deliver exact and precise audiences to advertisers - as opposed to traditional online targeting tactics, which substituted content and context as proxies for audience - is on," touts "Rubicon's Q3 Online Advertising Market Report," which was released early this morning.
Rubicon, which plays to role of a middleman developing systems and techniques for optimizing sales of online display inventory between publishers and an expanding legion of online advertising networks, added that the shift is being driven by, "Performance ads, creative optimization and real-time bidding," which major advertising brands and agencies are utilizing to "build more efficiency into their display campaigns."
The finding coincides with a philosophical shift on Madison Avenue, where major agency holding company media services operations say they have shifted from a mentality of "buying media," to one of "buying audiences," and that technology and automation have enabled them to accelerate that shift.
"Data is the fuel that drives today's audience targeting engines. Data-driven audience planning and targeting tools ultimately enable brands and their agencies to reach and target verified audiences of prospects that look like their best customers," David Helmreich, vice president-interactive markets at verified audience data provider TARGUSinfo writes in the report. "These abilities benefit the entire advertising ecosystem from publishers to advertisers by removing waste and driving results."
Rubicon described this shift as "advertising 3.0," and said it will really start to accelerate as publishers begin selling their "audiences - not just their sites, zones, brand and content."
The third quarter report also indicates that the online display ad marketplace is beginning to emerge from the downward effects of the economic recession, and that so-called non-premium online display CPMs are firming.
CPMs across the Rubicon 20 Index - a composite of the 20 most heavily trafficked sites - have risen by an average of 8% vs. the second quarter of 2009.
"The growth was driven by increased spending by some of the ad industry's core advertisers - business & finance, telecom and automotive brands - that had previously been holding back," Rubicon said, adding, "We've remained optimistic throughout the last year regarding the health of the online advertising industry, therefore the growth and resilience in Q3 - proven by the $160 million invested in the ad network and exchange this quarter - came as no surprise. Based on pricing and spending behavior from customers and partners, as well as our early Q4 results, we predict the market will continue to improve through year-end, leading into a still-stronger 2010."
I wonder if the media buyers have gotten the message from the muckity mucks that they are "buying audience" now...even if you assume there is a mandate around this, it will take 18-24 months for digital planning and buying to transition away from the current model. Of course, folks like Rubicon sure hope this happens: When you're only buying audience, every impression on every site online is fair game.
If advertisers are waking up to the fact that the need to buy audiences, not media, then why are they still paying media compaines rather than paying the audiences?