Findings:

• Ad Placement: 31 percent of ads were not in-view, meaning they were never being seen by the audience.
• Targeting audience based on interest over simple demographics (sex, income) has proven effective. 37% of ads delivered reached audiences with known interests relative to their brand.
• Advertisers must keep a watchful eye on the type of content their brand is being associated with. 72 percent of the campaigns felt their ads were being delivery alongside objectionable content.
• Fraud is still a concern. .16% of ads were delivery to non-human targets from the IAB spiders and bots list. Though this number is low, unknown bots and more sophisticated fraud methods were not considered, making this kind of threat difficult to quantify.
• The findings showed that neither ad visibility nor the quality of the audience reached is reflected in the price of digital advertising. Advertisers need to do their own research in finding the best ad buy for their dollar.

These findings outline the necessity of in-depth campaign management throughout the entire length of an ad campaign.

It also demonstrates the need for a “viewable impressions” measurement when calculating the cost for advertising. Too much money is going out the window on ads that are not even being seen by customers.

“With 31% of vCE Charter Study impressions not being viewable, it is now abundantly clear just how important in-view measurement is to online campaign validation,” said Linda Abraham, comScore CMO. “In order for any digital GRP metric to be relevant in the online space and to be cross-media comparable, it must include validated ‘viewable impressions’ in its calculation. While audience and geographic validation are crucial – and should not be ignored – if a digital campaign rating does not also take into account whether or not the ad had the opportunity to be seen, then the metric fails to deliver a true apples-to-apples comparison to all other media.”

The New York Times tells of how things could look very different for the online advertisers in the future

The new head of the Bureau of Consumer Protection at the Federal Trade Commission, David C. Vladeck, says it is time for that to change. In an interview, Mr. Vladeck outlined plans that could upset the online advertising ecosystem. Privacy policies have become useless, the commission’s standards for the cases it reviews are too narrow, and some online tracking is “Orwellian,” Mr. Vladeck said.

Privacy is a serious matter for sure and it should be. Vladeck appears to be on a fast track, however, to creating sweeping change if he gets his wish.

In June, the commission settled a case with Sears that was a warning shot to companies that thought their privacy policies protected them. In just over six weeks on the job, he has asked Congress for a bigger budget and for a streamlined way to create regulations. And he said he would hire technologists to help analyze online marketers’ tracking.

“These are pretty aggressive moves for an agency of a new administration,” said Charles Kennedy, who handles privacy cases at Morrison & Foerster.

Experts are calling for caution as sweeping change could upset the Internet economy. Considering the fact that the Internet is one of the few industries that is performing well in the current economy would it be prudent to just come in after 8 years of a pro-business stance and pull the rug out from under the business? Vladeck has already said that the industry’s attempts to police itself are not good enough and is meeting with industry execs to talk about the issue.

“The frameworks that we’ve been using historically for privacy are no longer sufficient,” Mr. Vladeck said.

As seen in the Sears case where consumers were paid $10 to install software that then tracked them with their consent it is no longer good enough to tell people what they are signing up for and thus be protected under the law.

Sears had included information about tracking in its user license agreement, but that wasn’t good enough anymore, Mr. Vladeck said.

OK folks so it looks like the Internet marketing industry doesn’t have the support of Washington with the current state of affairs. Also, what once was may not be anymore. While it is early, it appears as if Vladeck is bent on making his mark. What is your take on this? Reason for concern or just some DC bluster? Let us hear you. This one could be real important.

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I am a little confused by the following sentences that appear to have come from the same source about the same subject matter. The first:

Internet advertising could fall by 5% in the first quarter of 2009, the first contraction in online ad spending since the dot-com bubble burst in 2001, market research group IDC said Wednesday

Ok, so despite the information from a direct study of CMO’s who see their internet advertising going up this year by 10% the IDC sees it differently. That’s fine. Research is out there to support any point of view. The frustrating part is this following thought coming from the same source about the same report:

IDC analyst Karsten Weide said growth in fourth-quarter search ads was only barely able to offset losses in display and classified spending. He forecast that while first-quarter search ad revenue will not collapse, growth will continue slowing — and display and classified ads will most likely show worse declines than in the fourth quarter of 2008.

OK so which is it? Are they shrinking by 5% or are they growing at a slower rate in Q1 2009? This is why I like to take a quick look at these ‘reports’, acknowledge that they exist and then move on my merry way realizing that no one really knows anything and all we can do is move forward with those who are also choosing to move forward.

Projections of ad spending and everything else are now going the way of stock market projections. The formula seems simple. Take the previous quarter’s results, say that the current quarter may or may not show growth or decline or could magically do both, apply a number to it then let it loose.

How do you feel about the supposed experts trying to predict what is happening to the online advertising industry? Do you trust them? Should this have any impact on what you do in your business today? I am looking forward to your opinion.

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I know I will probably ruffle a few feathers here but I don’t see this as such a big deal because I believe that most of the ‘success’ of these mediums has been more hype than reality. The article points out that the main reasons that what is really happening is the fact that advertisers are less likely to throw money at something that there is little proof of real returns, “Areas like mobile, virtual worlds and widgets are expected to be hit particularly hard, as it remains unclear what kind of impact ads in these media have.”

Since we internet marketers love to talk about what is cool and happening and what the next big thing is the industry tends toward hyperbole far too often. Hype exceeds reality in this space by a few years at a minimum. When people are forced to look at things with more discerning eyes the shine comes off of these new areas pretty quickly. Who can argue with Peter Kim, Senior Partner at Dachis which advises the likes of Johnson & Johnson on marketing strategies when he says:

“When we get into the need to drive results, you can’t spend money on the experiments and hope to keep your job and get your sales goals.”

That’s just reality talking and I believe that oftentimes the internet marketing world checks reality at the door and thinks cool outranks smart. It doesn’t matter what market you are in, when you throw away money on unproven (and sometimes just plain speculative) marketing options you are being irresponsible. Accountability in the financial markets is an important subject these days. How about accountability in marketing?

Aside from the effect of less spending there may be another consequence of this slowdown which will be consolidation in the already ‘boutiquey’ world of these experimental advertising vehicles. Investment in these kinds of companies will slow. This all comes together as a ‘perfect storm’ of difficult factors for this industry that is trying to tap into the tremendous ‘potential’ that may need to be redefined anyway. Realistic projections would be interesting to see versus the hype we see all the time.

To wrap up, Larry Bettino, a general partner at StarVest Partners, a New York based investment fund says, “The assumption that eyeballs would generate ad revenue is no longer valid. Many firms won’t be able to survive what is going to be a much more difficult environment.” What I take away from that is that is that we should be concentrating on the elements of online marketing that work. While it sounds very plain vanilla and not so exciting, search marketing is hard to argue with even the dollars are getting tighter. There is nothing wrong with getting back to basics even in the ‘new world economy’.

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Other winners include national magazines, national Sunday supplements, "outdoor," national cable TV, and Spanish-language TV, according to Nielsen.  The increases in these categories ranged from 7.7 percent (national magazines) to 0.5 percent (Spanish-language TV), but when millions of dollars are involved, those small numbers are still pretty impressive.

Indeed, a lot of categories weren’t so fortunate in 2007.  Spot TV markets saw decreases in spending, and so did network TV.  Spot and network radio suffered the same fate.  The biggest losers, though, were newspapers – advertising spending on national newspapers dropped by 5.2 percent, while spending on local newspapers went down by 7.4 percent.

As for other trends, MarketingVox reports, "Eight out of the top 10 advertisers decreased budgets.  General Motors continues to show the largest decline."

Judging from these developments, 2008 doesn’t look like it’ll be too kind to most marketers.  Still, those in the online field should do well, and data from the last quarter of 2007 will help us better understand where we’re heading.

Take statistics from Hitwise, comScore, Compete, and Nielsen//NetRatings as an example. Their reports don’t always cover the same ground, but when they do, the results are often quite different. Just recently, they created a question of whether Microsoft had lost or gained market share in a certain month.

So, again, this uncertainty isn’t really suited to the modern business world, and may, in fact, be causing a lot of onlookers to stay on the sidelines. Steve Wadsworth, president of The Walt Disney Company’s Internet group, told Seth Sutel, "We need measurement of the audience and their use of the system that’s clear, simple and actionable for a marketer. You need comparability with other media."

If that comparability is achieved, online advertising might go way up. It should go further up (or less far down), anyway, than it would have in the current economy without solid measurements.

The AP puts this year’s Web ad spending at $20 billion, by the way, up 25 percent from the previous period.

Ok, Borrell Associates has released their 2008 Outlook: Local Online Advertising report. They estimated next year’s total local ad market will reach a whopping $12.6 billion in spending.

Of that figure, Borrell said $5 billion will come from local search advertising. Another $1.3 billion should arrive as the local online video market triples from 2007.

Now for the bad news for the yellow pages and local news publishers, from the report:

Next year will be a perplexing one for local media companies trying to tackle the Web. Most yellow pages publishers, cable companies, newspapers, radio stations and TV stations are still pinning their hopes on their traditional sales reps being able sell online ad packages. But there is increasing evidence to support the idea that a greater investment in an independent online sales force will be necessary to continue the growth these properties have enjoyed for the past few years.

There is one thing that can potentially help the publishers that have been mentioned. Borrell suggested the pure-play Internet companies, like Google and Yahoo, may have an interest in partnering with local firms to bolster their local advertising presence.

We have seen this in the classified field, where Yahoo and its HotJobs site have a number of newspapers as partners to help sell job listings. Perhaps 2008 will be the year where these partnerships broaden in number and scope.

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King predicts that Internet advertising will be worth $36 billion this year, $5 billion more than projected in December 2006. Worldwide Internet advertising will increase by 24 percent in 2008 and 69 percent over the next three years, hitting $61 billion in 2010.

A spokesman for Zenith said: "We predict global internet advertising to pass three milestones in the next three years: to overtake radio advertising in 2008; to attain a double-digit share of global advertising in 2009; and to overtake magazine advertising in 2010, with 11.5 per cent of total ad spend."

Television will remain the leader in the global advertising market in 2010, with estimated revenues of $198.89 billion in revenues followed by newspapers. Zenith projects that in 2010 the Internet will account for $60.88 billion of total advertising spend and magazines will comprise $60.58 billion of spending.

Zenith estimates that by 2010 the Internet will comprise more than 20 percent in the same four markets, including Denmark, Norway and Sweden and more than 15 percent of advertising spend in ten other countries.

King projects that global advertising spending will grow by 6.7 percent in 2008, an increase from 5.3 percent this year. The U.S. presidential election and the Olympic Games in Beijing will add to the growth.

Direct Mail Advertising’s Online Effects

“Twenty-one percent of total adults in 2007 have responded to direct mail advertising in the past month by visiting a sender’s Web site, up from 14 percent in 2003,” stated Vertis Communications.  This may have happened as people became increasingly familiar with the Internet, or, to give marketers their due, may just be the result of more effective advertising.

Regardless, Jim Litwin, Vertis’s vice president of market insights, has an idea about why older men were particularly responsive – “men reach retirement and find more time to surf the Web,” he told Jack Loechner.  If that’s correct, businesses should remain aware that many women participate in a similar end-of-working cycle.

Yet for whatever reason, reaching retirement seems to be a little more conducive to this behavior than retirement itself, as 28 percent of men between 55 and 64 responded to advertising and only 15 percent of men 65 and older followed suit.

It’s all stuff to think about when trying to reach people with direct mail advertising.

Although normal television ads air for a prearranged amount of time (regardless of how many people see them), online ads work on a per-view basis.  Unexpectedly popular shows can, then, essentially “use up” a supply of ads.

Yet here’s another surprising point: David Kaplan discovered, “On average, according to TVWeek, the networks charge $25 per thousand viewers via broadcast, while the major nets’ broadband prices command $30 per thousand viewers.”

This oddity could have something to do with concentration.  People who are watching their televisions may also be cooking dinner, reading a magazine, or chatting on the phone.  People who are watching their computers are probably more likely to monitor (no pun intended) every single moment.  Advertisements might receive a little more attention as a result.

Not everything about these online TV ads is encouraging, however; given the looming effect of the writers’ strike, it’ll be interesting to see how long the trends can continue.