• by Chris Butler , August 30, 2007

If you're a brand advertiser, how do you know that huge advertising budget you just sank into online ads will generate revenue? How do you determine an accurate ROI on winning price wars for online search terms? Analysis of this year's advertising trends claim it's a sellers' market out there. Prices for online ad space continue to climb, inventory is getting scarce, and it makes sense for ad buyers to reexamine their purchasing operations. Ad buyers representing brand advertisers face multiple hurdles: high client expectations, staggering costs, fierce competition for ad space, and dubious statistics regarding CPM, CPA, and subsequently, the validity of advertising investments.

Just as your Amazon Gold Box is full of stuff you'd never buy, most Web sites you visit are full of annoying ads you'll never respond to. Advertisers are reaching audiences, no doubt, but not necessarily the best targets for their products. The inability to control where ads appear or predict the content of the publisher's Web site is equally alarming. How do you find the best target audience for your online ads without going bankrupt? And how do you reach that audience without bothering anyone else?

Combining cutting-edge technology with proven demographic profiling gives publishers the best chance at finding the right audience outside of the top 50 sites. And it is about the audience, not just search terms, panels, clicks, or page views. Those numbers are easy to manipulate. It's harder to fake an audience demographic.

Of course, what is that "cutting edge" technology? It's about the math, finding the algorithms that can predict who is most likely to be interested in which products or services, and then validating that estimate with third-party research. But those reports aren't much good on their own unless the next step, providing an opportunity to buy ads within that specific demographic, is easy to do. This approach allows smaller, niche Web sites to reach a critical mass of loyal customers.

For brand advertisers, search-based advertising is not a silver bullet either. Technology using search terms is limited by content and fails to assess the value of the user audience. Running ads for Tide detergent based on the search term "tide" leads to ads run on sites about tomorrow's high tide at the beach. Surfers are not Tide's target audience. Obviously the Tide ad would be more effective advertising on sites where parents who make household product purchasing decisions congregate -- sites talking about kids, sports, or schools. Since the scope of search-based advertising is enormous, brand advertisers can get better results for their ad dollars by finding their target demographic wherever these people congregate online. This is similar to advertising on multiple TV shows that all share a demographic and then running the same brand ads on these shows to raise mindshare among the advertiser's target consumers. By analyzing and compiling the user demographics of multiple Web sites, and using this aggregated research to place ad buys, brand advertisers can better connect with customers across a broad base of Web sites. Specialty and niche sites stand to benefit the most from this approach. While advertisers might overlook these sites individually, combining hundreds, if not thousands, of sites with similar audiences creates a critical mass that makes them extremely valuable.

Want to make more money this year? Tap into that critical mass. No one doubts that there is plenty of room to expand the range of online advertising. Online ad revenues are expected to rise 19%, to $19.5 billion -- but that figure represents only 6% of the overall advertising market. There's a lot more money to be spent online if the value can be proven. The future of effective online advertising is, quite simply, finding the people who want your stuff, not blanketing a huge population with messages they don't want to hear. Brand advertisers that spend millions finding the best demographic for their products should transfer this information into their online ad campaigns. The best way to do that is by finding the target demographic wherever they are online, not dwelling on the search terms that got them there.