January 21, 2008 · 04:11 PM

Ad Exchange

Everybody talks about it, but nobody knows how to define it exactly: web 2.0. Common sense is that in the current new era of the internet, so called user-generated content and personalized sites become ever more important. In the "everybody web", traditional ways of advertising don't fit anymore. The session "Ad Exchange" surveyed the next generation of advertising, focusing on web 2.0-applications.

Banners, inserts, publicity texts and graphics have to be theme-focused to be successful. Several new media experts discuss at DLD how theme-oriented advertising works:

• Magid Abraham, co-founder and managing director of ComScore. He previously founded and managed Paragren Technologies (now part of Siebel Systems), which specialized in delivering large scale Customer Relationship Marketing systems for strategic and target marketing.
• Omar Hamoui, founder and CEO of AdMob. Procuring more than 14 billion advertisements within two years, AdMob has become the largest marketplace for advertising in the mobile internet.
• Samir Arora, Chairman and CEO of Glam Media, the fastest growing social network which contains more than 400 popular blogs, websites and online magazines.
• Christoph Schuh, Chief Marketing Officer of Tomorrow Internet AG. Before, he worked for the German TV channel VOX and Verlagsgruppe Milchstraße where he directed Media Marketing and the Online Marketing Department.
• David Rosenblatt, CEO of DoubleClick, one of the largest providers of online marketing solutions. The worth of DoubleClick increased in the last years, Google paid 3.1 billion dollars for the company.

Host is Randall Rothenberg, president and CEO of Interactive Advertising Bureau, the trade association for interactive marketing in the U.S.

For advertising on the internet, new marketing strategies are crucial. Contrary to television, there is no clearly defined prime time. On the other hand, the internet offers the chance to personalize advertising and to target users by their special interests.

Advertisers have to deal with what ComScore co-founder Abraham calls the "little dirty secret about internet audiences": Many users visit many popular sites. The rest who does not belong to this "big portion of that 70 or 80 percent" is practically not reachable.

Those people are only occasional users or they visit very few special interest pages. "If you buy an advertising campaign on the web, there is a very little chance that these occasional users are reached by your campaign", he said.

AdMob CEO Hamoui mentions the diversification of advertising markets. In the future and already in present, there is a huge number of formats for advertising for example on widgets, on mobile phones or in videos. "As more and more different ways of getting users' attention emerge, it becomes a pretty different thing for an advertiser to manage the different modes to reach somebody", he predicted.

Decisive for the near future, the panel agreed, will be the question of whether traditional media companies can expand their market power to the internet sectors or whether they will lose more and more market share to new emerging businesses that exclusively focus on the web. "Right now, clients are moving revenue from classic advertising to the web, and increasingly to the mobile web", Hamoui recounted

Arora from Glam Media talked about the chances of ad networks. They might help to reach more users but their potential is also limited. "Where ad networks can help is in non-branded advertising in which you need to have some packaging of content and advertising - in verticals or niches or by either prime time targeting and user behavioral targeting."

Schuh recognized targeting as the most effective strategy for web-advertising, too. "The targeting technology can allow us to benchmark against performance orientated websites", he said. He indirectly criticized the policy of companies like Google who scan users' personal e-mails for keywords: "There is a business logic behind it, but users will continue to oppose such strategies."

He predicted a severe change in advertising business. "There will be a shift from the key account sales we have today in Germany - that means you sell dedicated inventory for a dedicated price - to a combination of premium content with dedicated price and other content with bidding tools." And he expected, in the German market there would be one billion euros in 2010 in ad exchange markets.

 

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