Traditional media buying will soon be on it’s last legs…What will replace it?…most likely Media Bidding. Then there are fast emerging mediums such as the online gaming ad space – along with its unlimited real estate – most agencies do not even have gaming on the radar yet.

Let’s face it, everyone is just now getting clued on search; and because search needs to be continuously monitored & managed, the cost associated can be prohibitive to most clients, forcing it in-house. In fact, I’ll argue that search should only be managed in-house, as it requires a refined understanding of the linguistics associated with the brand. Something that is inherently lost in translation with a traditional agency relationship, along with the inability to turn on a dime.

With traditional media, the days of advertisers accepting standardized ad rates that are based only on yearly readership or viewership audits and not bottom-line business results are coming to an end. Google recently experimented with the offline world on behalf of a group of publishers. It was a bold move that did not pay off as well as it should have, and the industry went back to their snug little boxes confident of the fact that the traditional media model would stay the same. Kudo’s to Google for trying to shake things up. I feel sorry for everyone who thinks that will be the last they hear of it…it will be back and when it does, ad inventory will go through the roof, resulting in an even greater complexity than what media buyers are used to today.

It is a scary thought to most agencies and publishers alike. The idea of a purely traded media marketplace. Many clients still believe large media buyers get them better deals. After two years of monitoring about $3 billion in spending from 17 clients — or about 5% of U.S. TV market — MPMA, the U.S. arm of Billetts, has found that advertisers often pay vastly different prices for the same inventory. It also found that the ability to fetch low cost-per-thousand rates had little to do with being part of a massive bulk buy: Big advertisers often paid premiums for their spots while little guys got discounts-and vice versa.

From an agency perspective, does the lack of correlation between clout and value undermine the very premise of media-agency consolidation? Anyway, enough of that, I’m just a creative guy without the ‘creds’ for serious money talk.
The convergence we are witnessing will all end up online, with all traditional channels competing in similar space. In other words, publisher’s will end up as the next niche channels competing alongside the networks.

This will allow all broadcast & publisher advertisers to target more effectively, measure results, and connect with the user in ways that were not possible before. If the goal is to produce campaigns with the highest ad completion rates, the highest click-through rates, the highest user interaction rates, and (ultimately) the most sales – there is no other way forward.

Proof of the convergence lives within new alliances such as that between TiVo & Brightcove:

TiVo will now deliver internet broadband video to subscribers.  In a partnership with Brightcove, a group of online content providers will be the initial offering to TIVO subscribers who have a Series 2 DVR box connected to the internet.
TiVo is also in the process of rolling out “Product Watch”, delivering on the promise of “Advertising on Demand”. The premise is simple…self-select a category such as automotive and TiVo finds and files all related/relevant content and commercials on the subject matter. Permission based tagging vs. new marketing.

It is also all going to be about locally targeted, niche markets. The more targeted, the better the results.
Traditionally, most stations have at least 50% of their broadcast time when they schedule their own programming. That’s a lot of free time. So, the more they can can create original, local programming that makes that connection, the more they’re going to be able to capitalize on that local bond.

Local advertising is a $94 billion dollar market. Brands get about 30% of it. The local online market is a $3.4 billion dollar market and Brands get about 4%; this represents an $850 million opportunity for local television. That’s exciting. That’s real money.

This will also make media buying much more complex. Think about it…in many cases, the exact same video content can be on multiple sites. Does that make the targeting value of that content the same? Does an ad in “Friends” on NBC carry the same demo target value as an ad in “Friends” on TBS? What about “Friends” on YouTube? The theory behind contextual advertising in current online advertising models like Google’s AdSense is that the context of what is on a page matters more than the brand name of the Web site it is on.

The notion that all advertising may become biddable, with portfolio management and technology playing an important role is real. Media buying firms, including search marketing agencies, are going to have to adapt. It may have started with search, but will expand to include fully integrated ad buys that includes Print, Radio, TV, VOD, OOH, Blogs, Podcasting, Online Gaming, etc, etc, etc. To manage this likely scenario effectively will require sophisticated tools (such as optimization technology) and portfolio-management expertise.

The market is maturing and will quickly reach a critical mass of buyers. Search engines will build an integrated marketplace. Advertisers will fast become educated. Media buying companies that do not actively participate in that, will be wiped out.

Media Agencies in Danger of Becoming Obstacles, Not Enablers
Siloed Planners and Buyers Are Lost in a Platform-Neutral World

Wal-Mart Backs Online Auction for TV Ad Dollars
Retail Giant and Other Marketers Look to Build $50 Million Test System

Double Fusion Acquires In-Game Ad Firm · MarketingVOX…

Blog Spending Leads Alt Media…

MediaVest, Carat Fusion Tap Klipmart For Scaled Video Campaigns…

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