Damon Balch
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A Billion Here, A Billion There.

10/16/2013

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It's getting hard to keep up with the accelerated growth in mobile ad spend, and so eMarketer issued a substantial revision of a previously aggressive forecast. Back in June the company expected mobile ad spend to reach $7.65 billion in the U.S. Only two months later the research firm is adding nearly a billion dollars to that projection -- now seeing mobile media reaching $8.51 billion this year.

The increased forecast will bring the share of overall media spend on mobile to 5% and the share of digital ad spend to 20.1%.

This 95% growth in mobile spend this year puts device-based advertising on a trajectory to reach $31.13 billion by 2017. The annual spending increase will naturally diminish, but will remain in mid double digits for the next few years. eMarketer sees 2017 as an important tipping point, where 50.7% of digital ad spend will be going to devices.

As with online generally, search is driving the spend -- accounting for $4.3 billion this year and $15.3 billion in 2017. The velocity of the shift in search spend to mobile is truly staggering, and certainly explains why Google especially has been scrambling to revise its AdWords buying models to include all screens and to argue for a redefinition of what constitutes a mobile conversion. In 2010, eMarketer estimated that 2.1% of digital search spend was going to mobile devices, but this year it should account for 22.1% and then skyrocket to 59.6% in 2017.

Display, however, has a strong presence on mobile -- trailing only slightly behind search with $3.8 billion, and almost overtaking it by 2017 with $14.5 billion. Within display advertising, video is expected to be a breakout star, growing from a mere $576 million this year to $3 billion by 2017. By 2017, 48.4% of digital display ad dollars will be spent on mobile, eMarketer projects. 


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October 09th, 2013

10/9/2013

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Damon Balch: October 9, 2013

Let’s take a little stroll down memory lane for a moment.

A number of people have been asking me lately about targeted display media….how to buy it and how it works. The fact is that when you look at where things were even six months ago and compare it to where things are going, you see a distinct story that portends the future of advertising very clearly.

Online advertising, and specifically the display ad business, began as an outgrowth of print, with ads coming as banners reminiscent of basic print ads.  Those ads were placed initially on sites that had traffic (literally – any traffic at all was good).  There were a couple of search engines, some content sites of value, a couple of portals, a couple of ad networks.  The business model was simple, the ad revenue was based on total impressions.  In some cases they sold the placements as day, week or monthly rates for fixed positions. 

Buying at this stage was based on traffic size and quickly evolved to contextual buys, with media planners identifying placements that had a high composition of the target audience and a relevance to what they were selling.  This model dominated the last five to six years of the business as traffic grew, the volume of sites and pageviews exploded, and ad networks began to aggregate more and more of the long-tail inventory. 

The next stage of the display business came via behavioral advertising, or buying based on previous site behavior. Of course, behavioral brought a watershed moment to publishers because you could segment your audience and sell pieces of it for a higher price because of its value to the media buyer,  thus also reducing waste against nonessential (that is, untargeted) audiences .

Behavioral signaled the development of audience-based buying: where we are today.  Advertisers in today’s economy are far more advanced, bringing first-party data to the Web, accessing third-party data and using the combination to dive deeper into audiences, using demographics, psychographics, behavioral and customer data to power algorithms that deliver hyper-targeted audiences to just about every facet of online marketing, not just display ad buys. 

For the very first time, media buying can truly be automated and managed by a smaller team in an enterprise fashion. 

That brings us to today, and my view of what tomorrow looks like.  I foresee an advertising world truly dominated by companies automating everything across all media channels, not just online.  In the last few weeks, numerous companies are offering and promoting addressable TV, but the model applies to digital outdoor, print, radio and even guerilla media.  All media will be capable of being managed in a programmatic way in the future, though the parameters for the delivery of that media will limit the scope.

For example, print inventory can be managed in an automated fashion, with magazine publishers logging into a Web interface, seeing who has purchased space and delivering the materials digitally, then sending the issue to print with the ads integrated.  Digital outdoor is no different than a screen with an ad server, so that’s a no-brainer.  TV will always have the up fronts to lock in the majority of the prime programming, but the spot market will offer scalabale programmatic inventory opportunities. 

I’m not saying all media will go the 100% programmatic route, but I can see a world where as much as 65% of all media is purchased in this manner, with publishers still selling their highest value, premium placements directly and using the infrastructure of programmatic to book and manage that inventory.

All of this is clearly because agencies and buyers want it this way. They can manage more media with fewer staff and increase margins.  Publishers want this -- they can sell more inventory with fewer sales reps, plus they get higher value for all inventory when it is properly segmented.  Marketers want it – it affords them more control and the ability to get in and get out quickly.  This is literally a place where everybody should WIN.  (Pause)

So if this is the future, why would their be a need for sales reps of specific products, such as TV, Radio, Direct Mail, Email, SEO, PPC, SMS and down the line?  (Pause)

Because automation is NOT creative!  And we all know, creativity is what drives successful advertising campaigns.  It’s NOT the campaign pricing structure and it’s NOT the size of audience the specific medium reaches.  (Pause)  It’s a good ol fashioned relationship of the consultant with the client and developing SOLUTIONS to build the local business.

If the price or size of audience was the main factor, then all of the automated, programmatic companies would be the ONLY place to advertise, but in thousands of cases, those campaigns FAIL.

So what is the future then?  We are not changing programmatic systems and automatic offerings by media and online companies.  But what we can change is how they are used and position ourselves as a conduit between the client and these online audiences.  And the best way to do that is offering a 1on1 hands on good ol fashioned consultant, who knows the clients industry and provides ongoing research, resources and relevant IDEAS! 

One of those ideas and opportunities is our partnership with REPLYBUY. ReplyBuy's the fastest way to reach customers at a moment's notice.  Broadcast and sell up-to-the-minute inventory, items with a limited quantity or perishable offers all with a few clicks.  Create time-sensitive campaigns in minutes! Introduce simple campaigns each month to sell new products, exclusive offers, premium goods, tickets available for pre-sale, insider specials and more.  Make sure and tune in next week to our training conference calls for all of the details, kevin Martinelli will be announcing our partnership and training on how to sell it and use it for your clients!

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    Damon Balch

    A 20+ year advertising executive is providing a no-charge idea driven consultative business overview.

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