• by Dave Morgan , Featured Contributor, January 11, 2007

The new year begins and online advertising continues to boom. All is right with the world, right? Not really. If even a modest number of the top 1,000 consumer marketers woke up tomorrow, realized that they have been under-spending on online relative to offline advertising, and decided to double their online spending to bring it more in line with the amount of time that consumers spend online, it's very likely that their agencies could not find any appropriate places to put it.

Today, unfortunately, the online industry just does not have enough additional accessible high-quality inventory to handle a major influx of new spending, particularly in key vertical content areas. For example, it has been widely reported that the contextual inventory on car sites was almost entirely sold out for 2007 before this year started. What is General Motors to do if it wants more? This is a problem.

Our Web pages can't take a lot more ads. They are already cluttered. Consumers and advertisers both complain of this regularly. We can't charge a lot more for our ads. In many cases, online ads are already being priced in the competitive range with other media. What are we to do?

We need more appropriate inventory (yes, there are billions of pages on the Internet, but how many of them would you want your client's ad on, and how many attract the kind of audience your client wants to reach?) We need more Web page views. We need more consumer involvement with Web content. That is coming, but not fast enough. The major portals barely grew their audience at all last year, certainly nothing close to the 30+% increase in ad spend. The same for most major vertical content sites. Most of the growth online has been in social, video and photo sharing, and in Web application usage--and these sites' ad models are still in a very early stage of development.

Assuming that the growth of quality content appropriate for advertisers will continue to fall behind inventory demand, what else can we do to help assure that online is the go-to place for marketers?

We need to make better use of inventory. We need more and better targeting-- better contextualization, better behavioral targeting, better registration targeting. We need deeper networks. We need to make more inventory accessible to advertises. We need less waste. We can't keep throwing away 10+% of ad impressions to make up irregularities in counting methodologies. We need less friction in the market. We need to make it much easier to plan, buy, deliver and measure campaigns.

Certainly we need more video. There is no question that video can be more impactful and can support more value from advertisers.

Finally, I think that a lot of the answer may lie in helping advertisers understand that their messages can be effective in inventory they is underused today. Only online advertising can support real-time interactivity and dynamic targeting and reporting, so we can know more about the people receiving ads--or what people should receive, and when and where--than any other medium. We have unique consumer insights and can tell advertisers and their agencies valuable things about their audiences and their campaigns and their products and services--things that they didn't know, and need to know. This can help them reach consumers in places that are not apparent to them right now, thus opening up underdeveloped inventory. Over time, I think that we will find that online ad-based consumer insights will be more valuable than the media that we use to deliver the ad and capture the insights.