24/7 Real Media's Interactive Marketing Experts Reveal Their Online Advertising Predictions for 2006; Podcasting, Online Product
November 08 2005 - 8:00AM
Business Wire
Japan Poised for Dramatic Growth in Interactive Marketing; Search
Becomes the Next Lead-Gen Tool and Bolsters Its Presence on Madison
Avenue After a remarkable resurgence in 2005, the online
advertising industry is now looking forward to the trends and
developments likely to have the greatest impact on the industry's
growth and direction in 2006. Interactive marketing experts at 24/7
Real Media, Inc. (Nasdaq: TFSM), an interactive marketing and
technology pioneer, today revealed their Top 10 online advertising
and interactive marketing predictions for 2006 during Ad:Tech 2005
in New York. Among the most remarkable revelations, 24/7 Real
Media's experts predict that search engine marketing, which helped
boost the entire online advertising sector in 2005, will reinvent
itself as a lead-generation channel while continuing to drive
significant advertising revenue. Podcasting, blogging and mobile
applications will become more attractive to advertisers, as
behavioral targeting becomes increasingly indispensable for
delivering the right content to the most receptive audience. The
24/7 Real Media experts' Top Ten Online Advertising Predictions for
2006 include: 1. Consumer-generated media will become increasingly
attractive to advertisers 2. Advertisers will continue shifting
traditional ad spending to the Web due to increased Internet
consumption and better targeting/reporting capabilities 3.
Advertisers, cable providers and interactive marketing experts will
collaborate to address "The TiVo Effect" 4. Brand advertisers will
drive the next wave of growth for the paid search market 5. Best
practices in localized mobile marketing will be perfected overseas
in 2006 6. Online advertisers will employ holistic targeting
methods to deliver better results and reduce reliance on
high-profile, high-CPM ad buys 7. Technology and better data access
will transform online advertising success to a formulaic equation
8. Japan will be the next frontier for paid search and interactive
marketing 9. Mobile carriers will adopt new ad models to boost
revenue beyond usage 10. Performance-based pricing models will
demonstrate the true value of search engine marketing (SEM) as a
lead generation channel "Thus far, 2005 has been a hallmark year
for the online advertising industry, led by the explosive growth of
the paid search market, and richer, more interactive and creative
advertising facilitated by increased broadband penetration around
the globe," said David J. Moore, chairman and chief executive
officer of 24/7 Real Media. "We believe the momentum of the past 12
months is likely to continue in 2006, and our experts in media,
search and technology are already anticipating the key trends and
developments they believe will play a significant role in shaping
the continued evolution of the industry in the year ahead." 1.
Consumer-generated media will become increasingly attractive to
advertisers Podcasting, blogs and 'wiki' will continue to gain
momentum and attract an increasing number of consumers - both
content creators and content users. All indicators point to
consumer generated media becoming a promising 'ad spend'
opportunity, particularly for advertisers looking to reach specific
micro-communities. Interactive advertising service providers
seeking to capitalize on these opportunities will need to provide
scale in both global advertiser acquisition and service delivery,
and in data complexity - handling hundreds of thousands of sites
with millions of transient visitors. New technologies will make ad
delivery easier for publishers and advertisers, including filtering
unsuitable content to protect advertisers from unwanted
impressions. Better blog and audio/video search tools will increase
traffic and dramatically improve relevance metrics. 2. Advertisers
will continue shifting traditional ad spending to the Web due to
increased Internet consumption and better targeting/reporting
capabilities The Internet has replaced the TV as the most sought
after medium across different demographics, and time spent online
continues to grow. This trend will enable Internet advertising to
steal a greater share of advertising dollars away from TV networks.
To illustrate this point, Google will sell more advertising in 2005
than any of the major TV networks or newspapers. 24/7 Real Media
anticipates that in 2006, Internet advertising will continue along
on the same trajectory that the cable TV industry traveled during
the 80s and 90s. The key differentiating factor that will continue
to fuel growth of Internet advertising is its transparency,
flexibility and accountability, making it the ultimate marketing
tool. 3. Advertisers, cable providers and interactive marketing
experts will collaborate to address "The TiVo Effect" In the past,
TV advertisers knew that 50 percent of their advertising was
wasted, but were unsure which 50 percent. With the proliferation of
DVRs, and the inevitable commercial-skipping "TiVo Effect,"
advertisers suspect the waste is increasing, but have no real way
to measure. Interactive TV could be the answer that advertisers are
looking for - incorporating the creative bandwidth and storytelling
capabilities of television combined with the real-time delivery and
tracking abilities of the Internet. Until iTV becomes a reality in
the United States, TV advertisers will begin pressuring cable
providers - many of whom now offer DVRs - to create an interim
solution that addresses the TiVo Effect or suffer decreased future
ad spending. 24/7 Real Media believes that the cable companies will
turn to interactive marketing experts to replicate the successes
they have achieved in delivering targeted messages online. 4. Brand
advertisers will drive the next wave of growth for the paid search
market Even as performance- and acquisition-focused advertisers
gravitate towards the direct response benefits of search, 24/7 Real
Media experts expect to see a significant uptake in search from the
major agencies and traditional off-line advertisers. This will be
led, at least in part, by continued research and data into the
branding benefits of search, studies into assisted and unassisted
recall of brands based on participation in both display and search
results in the same user session, the emergence of view-through
data, as well as the tendency both from the engines and search
engine marketers/agencies to bundle search messaging with
display/affiliate/e-mail/other elements into consolidated media
plans. This will allow the search sector to continue its current
growth rates, reaching a critical mass in terms of benefit and
audience that will enable it to finally become more than just a
speck on the "big agency" media schedule. 5. Best practices in
localized mobile marketing will be perfected overseas in 2006 The
explosive growth of mobile ownership and the emergence of novel
mobile behaviors in India and China will far overshadow mature
markets elsewhere in South East Asia. With low PC ownership rates,
cell phone and TV will continue to dominate the consumer's
interactive media experience. Less restrictive regulatory
environments coupled with the introduction of current generation
mobile infrastructure have created a thriving market for rich media
mobile content and value added service providers. Wireless carriers
will soon deploy services with the ability to pinpoint local
audiences and serve them targeted local advertising using enhanced,
searchable "yellow pages" functionality. These markets will not
only see the emergence of new use models, but also new business
models. As a result, best practices in local advertising will be
perfected in overseas markets long before they arrive in the United
States. Interactive advertising providers with global reach and
scale will benefit most from this trend in 2006, and be able to
leverage these opportunities well before their landlocked peers. 6.
Online advertisers will employ holistic targeting methods to
deliver better results and reduce reliance on high-profile,
high-CPM ad buys In 2006, advertiser focus will be more on the
audience itself and less on where or how the audience is captured.
There is a nearly unlimited supply of ad impressions, but a limited
number of Internet users. With growing Internet adoption rates,
advertisers have gravitated to a handful of popular sites or
portals in hopes of reaching their intended audience though this
narrow tract of ad space. Next year, advertisers are going to take
a more holistic approach to reaching their audience. Rather than
purchasing high-CPM ad buys on high-profile, heavily trafficked
sites, advertisers will merge behavioral, demographic and
geographic methods to generate better results across a wider range
of niche sites. In addition, audiences will be segmented similarly
to the offline market so that tried and true methods, perfected
over decades, can be applied to the online world. 7. Technology and
better data access will transform online advertising success to a
formulaic equation Online advertising will become a pure math
equation in 2006 and see the emergence of a new "CPx" (Cost Per
(variable)). Recently, there has been a refocus on Major League
Baseball statistics to highlight on-base percentage over batting
average as the best indicator of a hitter's impact. In the same
way, online advertising will be driven by more strategic
quantitative analysis across segmented audiences. Media companies
will have greater access to more finely tuned targeting methods
that segment out audiences based on the most important variables.
The new statistics will help advertisers and publishers to identify
and influence audiences more efficiently and effectively. The
ultimate result will be new models of how to approach advertising,
and new ways of reaching consumers. 8. Japan will be the next
frontier for paid search and interactive marketing With an economy
poised for dramatic expansion next year, Japan has the second
highest number of Internet users and broadband users in the Pacific
Rim after China, according to PricewaterhouseCoopers. 2006 will
prove to be "the year of search engine marketing" in Japan, and the
country's Internet advertising sector will experience its strongest
year of growth ever. According to PricewaterhouseCoopers, Japan
already has the second largest online advertising market globally,
behind the United States, with revenues projected to increase
nearly 20 percent to $1.7 billion by the end of this year. However,
paid search is the area that is poised to show dramatic increases
over the next twelve months, with the major traditional advertising
giants in Japan all vying for a piece of the action. 9. Mobile
carriers will adopt new ad models to boost revenue beyond usage The
next year will see mobile carriers begin to experiment with a
variety of ad models and delivery platforms as they look to expand
their revenue beyond usage. In addition, 24/7 Real Media experts
anticipate that video ads will begin to appear on phones as mobile
video usage increases to the approximately 6.1 million subscribers,
reported by M:Metrics. SMS will be utilized primarily as a customer
relationship management (CRM) tool for advertisers to continue
dialog with existing customers much in the same way email is
currently utilized. Ad standards will also begin to shake out for
WAP display ads through the efforts of the major carriers, service
providers and mobile industry group, MMA. 10. Performance-based
pricing models will demonstrate the true value of search engine
marketing (SEM) as a lead generation channel The majority of the
market has left traffic arbitrage behind, and search engine
marketing is more credible for it. "Value" arbitrage, however, has
yet to be fully exploited to any significant extent. With the
ability of sophisticated SEM tools to understand both the market
price for inventory and the true value of that inventory to the
advertiser, coupled with margin pressures on "managed services,"
24/7 Search experts anticipate that SEM firms and agencies will
more willingly embrace and participate in performance-based pricing
models. This will transfer some of the performance risk to the
operators, who must use their experience and tools to deliver the
value they have long promised, and who will share in the return
generated. For the skilled SEM firm and tool developer, this will
drive higher returns and closer client relationships, while
maintaining transparency of the medium. For the savvy marketer,
particularly in acquisition-based industries, this will transform
the view of search from an advertising medium to a lead generation
channel. About 24/7 Real Media, Inc. 24/7 Real Media, a pioneer in
interactive marketing and technology, targets and delivers
audiences for publishers and marketers. Our customers generate
increased revenue and profits through media and search services,
coupled with one seamless platform of serving, targeting, tracking
and analytics technologies. The company is headquartered in New
York, with offices in other major U.S. cities, Canada, Europe and
Asia. For more information, please visit www.247realmedia.com.
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