The Changing Face of Online Advertising

Online Advertising Progress

Over the next few years the online advertising landscape will change dramatically. Consumer consumption of video, mobile and social are all starting to play a role in the way we plan and buy media however by 2015 our online media schedules will look very different to how they look today.

Video Advertising

Video advertising is one of the fastest growing segments in the online advertising market. In fact it is growing so fast Google predicts by 2015, 50% of ad campaigns will include video ads bought on a cost-per-view basis (that means that user will have choice whether to watch it or not).

Video advertising is still however in its infancy despite the fact that consumption of video by Australian consumers is significant. According to the IAB, Australians are now watching almost 1 billion videos online each month which provides a lot of opportunity for advertisers. And even though video based advertising grew by 83% year on year in Australia, total video spend by advertisers equated to 5.3% ($33.4m) of total digital advertising spend. This demonstrates just how far the industry will come in 4 short years if Google’s predictions are correct.

Whilst video advertising provides a significant opportunity for marketers it is not without its challenges. As some video channels / networks allow viewers to skip advertisements, marketers will need to provide more than a traditional TV style commercial– engagement and entertainment will be far more important in the video ad space.

Mobile Advertising

By 2015 it is anticipated that mobile internet will surpass desktop internet usage – and with that mobile advertising is expected to undergo rapid growth. In fact according to Gartner, global mobile advertising spend will total $3.3 billion in 2011 and this figure will balloon to $20.6 billion by 2015.

Like video, mobile too will bring several challenges. Small screens / ad formats will make it more difficult for marketers to communicate their message. The power of mobile combined with local however will also provide new opportunities for marketers to connect with consumers when and where it is relevant. We have already seen the power of mobile and local via Foursquare which has enabled retail brands to connect with consumers however this is the tip of the iceberg. Over the next 4 years will see significant investment from Google, Facebook and start ups in the mobile / local space, which will also result in new ad formats and opportunities for brands to target new and existing customers.

Social Advertising

In 2011, US marketers are expected to spend $3.08 billion on social network advertising, which is roughly 10% of total ad spend online and an increase of 55% from 2010. Whilst we are behind the US when it comes to digital, marketers take up of social media in Australia is on the rise so there is no doubt that social advertising will make up a larger slice of the advertising pie in the future.

McDonald FarmvilleSocial advertising doesn’t just refer to display ads on Facebook. Whilst Facebook is one of the key social channels that marketers are advertising on, the social phenomenon is giving rise to new advertising opportunities. One of the growing trends in the social space is that of social gaming. As a result we are seeing social gaming organizations like Zynga building branded experiences into games. This includes McDonalds use of Farmville to provide virtual McCafe to players so they can work at double the speed as well as Honda’s virtual billboard in CarTown to name a few.

Social games aren’t however the only trend in the social advertising space. Social behaviour will also have an impact on how ads are consumed in years to come. According to Google just like most news articles on the web today can be commented on, shared, discussed, subscribed to and recommended, by 2015, 75% of ads on the web will be “social” in nature—across dozens of formats, sites and social communities.

Like mobile and video these social advertising trends will also present several challenges for marketers. Consumer’s ability to comment, share and rate advertising will change the fundamentals of advertising. Consumer’s will have a right of reply to a brand message and this is going to provide all sorts of challenges to marketers. Whilst new social advertising opportunities like those within social gaming platforms and across social networks will mean marketers need to become more creative, to deliver more than just their message.

What other trends do you think will impact online advertising in the coming years? Share your thoughts below.

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