New dynamics in digital advertising

Published by: Ovum Plc

Published: May. 22, 2009 - 43 Pages

Table of Contents

Executive summary

In a nutshell

Key messages

Online advertising is a glimmer of hope in the recession

The digital advertising value chain is in a period of disruption

Other areas of digital advertising will not fare so well

Targeting based on deep packet investigation (DPI) is driving concerns over privacy into the regulatory arena

Social media fosters new models of engagement but should not be seen as an advertising nirvana

Do not underestimate how difficult it is to get application-based advertising right

Twitter has potential as a marketing and advertising channel

Rich media is good but sympathetic execution is better

New metrics identify the media really doing the work

Digital advertising value chain analysis

The changing shape of the digital advertising value chain

Advertisers

Advertisers take more direct control of agency functions

Advertising and media buying agencies

Digital performance metrics are becoming more granular

Advertisers are bringing more online ad functions in-house

Ad exchanges and auctions are disrupting media buying

Conversational marketing is changing the nature of advertising inventory

Advertising networks and exchanges

The rise of the horizontal players

Competition kicks in, forcing differentiation

Targeting: behavioural and contextual ad networks

Premium ad networks

Platform/media specialists

The vertical ad network explosion

The role of the advertising exchange

Ad serving and targeting

Ad serving in a nutshell

The importance of targeting

Contextual targeting

The rise of behavioural targeting

Deep packet data inspection: kicking up controversy

Media owners

The changing nature of digital advertising inventory and those who own it

The rise of social media

Digital media metrics: models for measuring value and performance

Cost per thousand impressions (CPM)

Cost per click (CPC)

Cost per acquisition (CPA) model

Key trends and future developments

Social networks: a new model for engagement

Getting the rules of engagement right is critical

Engagement also carries risk

Picking the right network for your brand/campaign

Do not treat social networks as the new online gold rush

Application-based advertising

The challenge of branded applications

Twitter: a rising advertising channel?

The case for mobile advertising

Mobile has a lot to offer

But the market is still very modest

Building a stronger commercial framework

The iPhone effect: will it work its magic on mobile advertising?

Cross-platform advertising

The three-screen dream has not come true

Mass search starts to fragment

Semantics support the spread of category search

Digital advertising formats get richer

Online video is the most commonly viewed of the rich media

Rich media driving higher consumer engagement

Where next for digital advertising metrics?

Targeting and privacy issues are coming to a head

Deep packet inspection in context

An ongoing debate rising to a head

Opt-out is not really putting the user in control

But attention profiling might do

Regulatory bodies are circling behavioural targeting

The prospects for digital advertising in the recession

Online advertising: a glimmer in the recession gloom

No surprises on the revenue drivers

Mobile advertising will struggle but not die

List of Tables

Table 1: Internet advertising market shares

Table 2: Total advertising expenditure by medium ($ millions)

List of Figures

Figure 1: Digital advertising value chain before reconfiguration

Figure 2: Digital advertising value chain reconfiguration

Figure 3: The ad exchange relationship web

Figure 4: The changing face of web content and consumption

Figure 5: Social network segmentation

Figure 6: Potential mobile advertising channels

Figure 7: Digital advertising formats by richness

Figure 8: Last ad wins 100% CPA credit

Abstract

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