Chris Dessi - Vice President zanox, Inc

US Online Advertising:
Resilient in a Rough Economy
Summary

Even with the Olympics and presidential election campaigns on the horizon, overall ad spending in the US is in the doldrums. Except online. US Internet advertising will not only be more resilient than traditional media, it will grow. In fact, in 2009, 10% of all US ad dollars will go online.


The US Online Advertising report analyzes the factors that are contributing to the continued growth of the Internet channel in tough economic times.

Even as the growth rate declines through 2009, overall Internet ad spending increases will remain in positive territory—in the mid-teens or higher through 2011.

This growth, even if less than in years past will surpass all other major media.

There, I said it. All online advertising should be performance based, period. For years I have been working with clients, and agencies alike all trying to make sense of their ROI online. At first we had the CPM model. During my time at Mediaplex, before it was a Valueclick company, and before the Ad Agencies saw them as a threat to their own in house media planning and buying teams, CPM was king. There were a few (to state mildly) issues with buying ads in a CPM scenario back then. Each third party ad server thought they were tracking impressions appropriately. Why was this a problem? Because if you're an advertiser in 1999 and your using (for example) both Mediaplex, and Doubleclick to serve your ads, you may be paying $.33CPM for one and a $.44CPM to another. This may seem like pennies, but when you're dealing with billions of impressions, the dollars start to ad up.

Back then this was OK....well sort of...that is until guys like Adam Gerber at The Digital Edge (Y&R) would start to ask questions about the impressions that he was purchasing on behalf of his very large, very demanding clients. I can recall Adam stopping me in the halls of the Digital Edge shoving a finger in my face, and saying "I want answers"....well the reality was that I had none for him. We didn't really know if an impression was served or not. We could only assume based on certain variables. We could provide reports, but we could track that back to a sale. Some of the campaigns were strictly branding campaigns, which is great, but branding for who, how were they measured? Obviously this was a very qualitative not quantitative approach.

Then came CPC, and all was good in the world. Or so we thought. That is until fraud started to pop up.

Now we have CPA, or CPL, and this is the only manner in which an advertiser can actually track conversions. Why are you advertising online? To generate a conversion, whether it be a lead, or a sale...performance is the next step in the evolution in online marketing. Even in a branding exercises you need to track the conversions. If a click on a banner lands a user on a landing page, you want them to take action, not just view your landing page. If they view your banner, really how much "branding" is occurring? How can you quantify that? You can protect your brand by demanding you work with a transparent network, or you can protect yourself from fraud by demanding that you will only pay for a conversion after you've been able to confirm the pixel that's fired, but you really can never quantify online advertising unless it's performance based.

Ever notice you do your best thinking while getting ready in the morning? Those few minutes to yourself while soaping up your hair with nothing else to think about other than wondering why, in 2007 we still can't get AM news radio reception while listening to the the whizzing and buzzing of 1010WINS??

ANYWAY.....This morning, while listing to said whizzing and buzzing of 1010wins, I was thinking about the fact that come Oct, I'll have been with AzoogleAds, Inc for a Whopping 2 years! Now, to the untrained eye this may seem like only a small blip on the screen in what I hope is a very long career. The thing that struck me is that in this day and age, and especially in this industry (Online Advertising) 2 years is like an eternity (kinda like Dog years I suppose)?

At first glace on linkedin.com you can see the trend. The 30 something counterparts of mine in this industry that have been around since working for a "Dot Commer" was the "It" thing to do in thate 90's have hopped around more than Paris Hilton in the VIP lounge of the hottest club.....but why?

I have a few theories so let me start out at 10,000 feet and then I'll drill down to what I think may be at the heart of the situation.

Reason #1 Get out before they get me out
While I was at Mediaplex in 1999 there were a few rounds of layoffs before Valueclick came in and bought the company. There were young, fresh faced, hard working bright people just out of college (or in my case Grad School) that wanted to make their internet millions. Well, those same fresh faced kids got caught up in some serious downsizing. Some of our parents were lucky enough to never see that kind of company overhall in an entire career. We saw it in the first few years of ours. This was of no fault of our own, but non the less, we were unemployed at 24 years old. Many of us left the industry (I went to a design agency for 3 years). Others kept moving along, but would never have the same loyalty they felt with their first company.

Reason #2 The market is fantastic
If you're good at what you do, and people know about it, they'll offer you a job. Every conference like Ad:Tech is certainly the hotbed for this kind of activiity. Other companies seek out the Rockstars, and try to hire them away. Lots of times it works.

Reason #3 You can
When you send in a resume with 10 differnet positions at 10 different companies over the past 10 years. It's more than likley that at least one of the Sr. Executives at your company may have a similiar type resume.

Sometimes hopping around is the only way to take your career to the next level.

I have to say...at this point in my career, it's nice to finally find a spot to call home. For the first time since the early days when I was at Mediaplex I feel like we're onto something here. Maybe something big that we can say we were a part of. Soemthing worth sticking around for...

Only time will tell!