• by Erik Sass  @eriksass1, June 15, 2007

Lack of scalability is still the biggest obstacle facing niche online advertising formats including broadband video platforms, RSS feeds, blogs, and mobile networks, according to Jason Klein, co-founder and president of Special Ops Media.

Klein spoke on a panel discussion with representatives from each of these media at Digital Hollywood's last day in Santa Monica. While his fellow panelists conceded scalability was still a work in progress, they detailed some of their ongoing efforts to make the process easier and more transparent for media buyers.

"It's very challenging because a lot of times we have clients who are just getting used to interactive as a place to have their inventory," Klein noted, adding that in this context, every layer of added complexity represents a new barrier to clients juggling online and other budgets. And, while "we try to use the online dollars to do less traditional interactive," the basic problem remains: "Big advertisers with big budgets want to reach the biggest number of eyeballs possible, and if you're a niche player, it just makes it harder to do that."

However, sellers of the digital formats represented on the panel are making moves to present bigger, simple sales propositions to advertisers.

Paul Bowlin, regional sales director for SpotXchange and Booyah Networks, said, "I can have 50 different publishers that have audiences that range from 10,000 daily to 500,000 daily, aggregate them together in one vertical, and go back to the advertiser and say, 'you don't have to buy separately in this vertical anymore.'" This includes capabilities for targeting "down to ZIP codes" and by numerous other audience characteristics, if desired, in a system characterized by "complete transparency on the current bid rates for the inventory in the current marketplace."

Jason Spero, vice president of marketing for AdMob, a mobile ad provider, said one of his company's services is helping clients understand "how to handle fragmentation across handsets, how to handle fragmentation across service providers." Ultimately, the company seeks to avoid this problem altogether, by making "it so an advertiser can make one buy across audiences, across geographies, across providers, across handsets."

That said, the variety of mobile devices also offers opportunities for new kinds of targeting. "People may want to target device capabilities," Spero said, as well as very precise geographic ad serving based on changing locations, subscription plans, and so on.

Although Spero didn't mention them, competitors are also offering aggregation services in mobile marketing, including Third Screen Media, Millennium Media and JumpTap.

Despite the obstacles, the niche publishers overall remain confident about their various markets' capacity to grow--as do venture capitalists observing the space.

Louis Moynihan, senior director of strategy and development for Pheedo, was sanguine about the future of RSS: "RSS adoption is one of those figures that will drive more advertisers and publishers" to spend ad dollars on the medium, even if it's under-utilized now.

And Baris Karadogan, a partner in ComVentures, struck a reassuring note: "There are a lot of nascent areas, but as long as there's innovation, we see a lot of money coming in. It doesn't matter if these things may be niche now."