A great post from Silicon Alley Insider, but also a great report from JP Morgan on how digital marketing is set to see a very good year in 2010. Its hard to believe whether this is true or not but Imran has some reasonably well grounded facts to support his hypothesis.
Imran Fact 1:
New forms of display advertising above and beyond standard IAB banners will increase the effectiveness of advertising and thus the attractiveness.
Digigen viewpoint:
Imran points at sponsorships, time-based ads (which we presume will still be served in standard ad sizes), purchase data integration (re-targeting anyone?) and better ad formatting. These all seem to make sense but most digital agencies have been doing this sort of thing for awhile. I remember running a time-based countdown ad for Sky+ about 6 years ago for example.
Digigen fix:
Sponsorships and ad formats can work alot better when bought within the right model. Too many publishers still rely solely on CPM based models whereas we should all be pushing publishers to accepting engagement based CPE (cost per engagement), CPP (cost per play), CPL (cost per lead) models.
Imran Fact 2:
As the economy improves in 2010, we believe major categories will begin to stablize. This will drive this ad revenue into digital display advertising to take larger share of spend.
Digigen viewpoint:
True, the economy will hopefully improve, but with the recession we have become more frugal about what we spend on. The most immediate purchase will not be the high ticket items Imran talks about.
Digigen fix:
The larger spending categories should be using 09 and 10 to test out new channels and “shopping points”. Display ads aren’t really going to provide as good reach and strength of message as TV, so use digital to create a deeper engagement with your brand. VW Golf GTI solely launching as an iPhone game is a great example of an auto brand trying something new.
Imran Fact 3:
We expect RPMs to grow by 5%, driven by flat growth in impressions, and 5% growth in CPMs
Digigen Viewpoint:
This seems to make sense based on the other predictions that Imran has made – usage of new formats, publishers retaining premium formats, higher competition. 5% seems potentially a bit too low, I would probably look at a higher 7% growth.
Digigen Fix:
To offset the impending increase in CPMs, but smarter. Use sponsorships but make sure these are bought on a CPE model. Always buy on an action rather than a level of inventory. By doing this, although we may see some increase in costs, it will actually deliver better business performance.
All in all the report isn’t exactly mouthwatering given that we have talked about these sort of things: recovery and boom, for awhile. However, it is a good starting point for thinking about what can really be achieved if we think smart in 2010.
