Posted on 05/21/2007 12:36:16 PM PDT by abb
With online advertising's growth accelerating, the four giants of the Web have plunked down more than $10 billion in the past two months to buy businesses that control how ads are bought, sold and displayed across the Internet.
The latest deal came Friday when Microsoft said it would acquire Seattle online advertising and marketing firm aQuantive for about $6 billion in cash, paying an 85 percent premium above aQuantive's Thursday closing price of $35.87.
The announcement comes one day after WPP Group, the world's second-largest advertising and marketing conglomerate, said it would buy online advertising company 24/7 Real Media for $649 million. And last month, Google agreed to buy online advertising provider DoubleClick for $3.1 billion, while Sunnyvale-based Internet company Yahoo struck a deal to buy the privately held online ad exchange Right Media for $680 million.
The deals may signal a fundamental shift in the advertising industry, as the Internet becomes a major market for ad sales. Some analysts are even predicting that online ad revenue will overtake radio revenue before the end of this year.
"The Internet advertising business is still a stepchild to the advertising on traditional media like newspapers and television," said Jarvis Coffin, chief executive and founder of Burst Media, which sells advertising services to Web publishers. "What's happening here is a market reaction to underlying forces saying that that's about to change."
Since the dot-com bubble burst, online advertising spending has jumped from $6 billion in 2002 to $16.4 billion last year, according to eMarketer. And that number is poised to grow dramatically: The Web accounted for less than 6 percent of dollars spent on ads in 2006, but it's growing as much as five times the rate of offline ads, according to Oppenheimer & Co.
(Excerpt) Read more at mercurynews.com ...
Ping
Advertising spends big bucks. They control and/or influence a lot of what you get to see in all of the media.
Follow the money. Always follow the money.
I still don’t think online ads are really going to be a revenue driver. They’re too ignorable. There’s a reason online advertising has been around over a decade and still only has 6% of the market.
From what I've read, online advertising seems to be much more cost effective and measureable than broadcast. Or so the advertisers say.
I disagree.
I have a part-time business, and 90% of my customers look me up on the internet. I advertise heavily with GOOGLE & YAHOO.
Those ads are annoying, especially the ones that flash. They make it hard to concentrate on the content you came for. Advertisers should make them more subtle so they don’t alienate potential customers.
That’s what they say with their mouths, but with their wallets (which is really the vote that matters) they aren’t expressing that level of confidence. 6% of the advertising market really isn’t that much.
But what level of business are you, and what kind? There’s a difference between a local or small business and the ones that really drive the marketing business. The day WalMarts web-banner budget is at least half their circular budget I’ll believe online advertising really is on the path to ruling the marketing world.
I could be wrong but dont I recall MS going after Google and the double click deal?
I am a small business that serves a three county area.
This form of advertising is very cost effective as well.
I have tried radio, newspapers, etc. Nothing else came close.
The future trend is what to look for. Online advertising is growing while print and broadcast is stagnant. The facts speak for themselves.
You’re in a zone where the internet can really work for you. It’s probably the cheapest kind of advertising you can get that actually has an audience of more than a couple hundred people. But that doesn’t mean it’s going to change the advertising industry, just because it’s good for the low end doesn’t mean it’s going to replace the other stuff.
The problem is trends could stop at any time. Online advertising has supposedly been the big “coming thing” for over 10 years and currently only gets 6% of the advertising dollars, that’s a fact that speaks for itself. Maybe it will continue to grow like it has recently and start getting into the 10, 15 or 20% area, or maybe it’ll go back to the (negligible) growth level it had in the late 90s when everybody first started insisting it was the wave of the future.
One of the things that would really help online advertising prove itself would be a string of movies with big “internet buzz” (like Snakes on a Plane) that actually made money at the box office (unlike Snakes on a Plane). As long as “big internet buzz” equals “box office flop” it’s going to be really hard to get the big boys to really flop down serious money for internet ad campaigns, the internet needs to prove it can repeatedly and consistently haul in the cash.
George Lucas believes that a fragmenting entertainment market makes it too risky and expensive to produce feature films:
Star Wars creator George Lucas is to stop making big budget movies because he believes that the days of the blockbuster are over. ...
... Spending $US200 million ($A270 million) on a movie made no sense, Lucas added.
"For that same $US200 million ($A270 million), I can make 50-60 two-hour movies. That's 120 hours as opposed to two hours. In the future market, that's where it's going to land, because it's going to be all pay-per-view and downloadable," he said. ...
while Bob Garfield envisions a future where an Inet dialog between customer and producer replaces conventional advertising.
Maybe you'd better lean forward. Presently you will be given five reasons to consider something barely imaginable: a post-apocalyptic media world substantially devoid of brand advertising as we have long known it.
It's a world in which Canadian trees are left standing and broadcast towers aren't. It's a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalized and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing -- and even branding -- are conducted without much reliance on the 30-second spot or glossy spread.
Maybe you'd better lean forward. Presently you will be given five reasons to consider something barely imaginable: a post-apocalyptic media world substantially devoid of brand advertising as we have long known it.
It's a world in which Canadian trees are left standing and broadcast towers aren't. It's a world in which consumer engagement occurs without consumer interruption, in which listening trumps dictating, in which the internet is a dollar store for movies and series, in which ad agencies are marginalized and Cannes is deserted in the third week of June. It is a world, to be specific, in which marketing -- and even branding -- are conducted without much reliance on the 30-second spot or glossy spread.
THAT'S where the market for online ads are.
I agree.I had the experience of knowing where a store was, pretty accurately, and knowing its name, pretty accurately, and still having trouble looking it up. It seems that there needs to be a system for searching for, say, drugstores which would return all local drug store addresses/phone/email/IM addies ranked in order of driving time.
It seems that there needs to be a way in your web site to associate your business with the locale you serve. I propose as a rough cut that a business should have a page listing the type of the business next to the name of each nearby village it reasonably proposes to serve, so that Google can find it.
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