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|Search Advertising to Lose Importance|
Strategic Threat to Google, Say IDC
|Search advertising will retain its number 1 position as the advertising format garnering the most ad spend. However, even though absolute spending on search advertising will continue to increase, its market share will slowly decline from 40% in 2006 to 32% in 2011 as video advertising grows. |
Link is here [idc.com].
Google hasn't exactly been standing still. AdSense represents a move beyond search advertising, and even AdSense has been expanded with current or beta products such as site-targeted CPM ads (including display ads) and rich-media ads.
In the context of this forum, the relevant issue is how growth in non-search (and non-text) advertising will affect AdSense publishers. I suspect we'll continue to see a widening gap between the haves and the have-nots as publisher growth outstrips ad-budget growth and advertisers take advantage of site-targeted contextual ads.
I don't understand how the article can say video ads pose a risk to Google... Doesn't Google own the world's largest online video site and advertising tools?
Sounds like a swat to try and bump G's stock down... =)
These analysts reports should be taken with a huge bucket of salt. Were IDC predicting 5 years ago that search would be 40% of the online ad market? I bet they weren't. I'd love to see an analysis of IDC, Jupiter et als' predictions from 5 years ago to see what their hit rate is.
Video advertising will presumably be over networks like Joost. But just as traditional television entertainment attracted big bucks branding advertising, I think the typical advertiser will resemble, as it already does, the big bucks you see on cable commercials. Take a look at Joost by the makers of Skype and you'll see what I mean.
The overall pie may grow with new advertisers, and relative to the bigger pie search may look smaller percentage wise, but I think it's overblown to say this represents an actual erosion, at least not to search's reach.
Analysts being taken seriously will decline from 40% in 2006 to 32% in 2011 as they keep making outrageous claims just to get headlines.
That's pretty lol Incredibill. Since video ads are really just another type of contextual ad (assuming the ads are remotely targeted to the video they appear with) and since Google is poised better in video then any other company I know of, video ads are simply another extension of the contextual market as maximillianos said, so yippie skippie get on the video bandwagon already.
As far as silly Wallstreet analysts that want to grab headlines with ridiculous claims, just remember that they mostly DON'T invest in the companies they write reports on. Analysts are basically just employees that really don't know the inner workings of the industries that they are paid to cover since in reality they aren't in those industries at all. Anyone who's taken the advice of an expert market analyst and lost their shorts say I......I
Text ads are strong when it comes to products or services were demand already exists (I want to buy a blue widget but where?), however fall short in creating demands.
Video ads are strong when it comes to creating demands - for example advertising a movie - or for impulse buys. But they fall short when the demand already exists. Because I do not want to watch a 60 second video ad to find out where I can order a certain product. Thats enough time to check out 6 or 7 text ads and visit the sites to get a first impression.
However it might convince me to watch a certain movie which I had not heard of before or in buying a product I did not even know it existed ten minutes ago.
So video advertising will fill a gap but won't take any money away from text ads. Also you can run only one video ad on any page at a time, but can show a dozen text ads or more. Also producing a video costs money and time.
|Since video ads are really just another type of contextual ad (assuming the ads are remotely targeted to the video they appear with) and since Google is poised better in video then any other company I know of, video ads are simply another extension of the contextual market as maximillianos said, so yippie skippie get on the video bandwagon already. |
Contextual video ads may be a useful niche product (not unlike infomercials on TV), but the real future of video ads is likely to be in the mass market where ads are matched to demographics and not to keywords. Whether Google will be a leader in video advertising remains to be seen, but the purchase of YouTube was obviously a step in the right direction.
I think its a serious article written by serious people who should be taken seriously.
They 're not webmasters, but business is business.
They are stating a simple truth, that change brings both threats an oportunities to all the players in any market.
Google is the market giant in search, it is not necessarily the market giant in the market space inhabited by
youtube, myspace an a host of other online video entertainment providers,
These industries require different competences than those at which google currently excels,
Hence, supposing myspace with the backing an immense media experience of News international becomes the Titan of this new world?
If the greatest percentage of spend is now in this market , what then?
Perhaps its a pertinent time to point out that a further threat is to all the webmasters who are perhaps more tied to adsense than they should be
Thanks to the OP for that link
I don't want to say "never" but it will be a long, long time before computer algos can figure out what a video is actually about. Therefore, the only way of determining video "context" is by human labeling, voting, etc. Google is pushing the envelope there with the voting on Google Image search, but it's very, very crude compared to the targetting Adwords advertisers are used to with text search.
Video advertising may be great for corporate image ads and maybe for entertainment ads, but I don't think they will be able to seriously compete with contextual ads for a long time to come. Keep in mind that the very attraction of Adwords is that it's not the shotgun media advertising that TV, radio and print has tradionally been.
|Keep in mind that the very attraction of Adwords is that it's not the shotgun media advertising that TV, radio and print has tradionally been. |
Traditional media advertising isn't necessarily "shotgun." Sure, commercials for Coke, Tide, or Toyota may be, and for good reason: those products appeal to mass audiences. But ads for The Tire Rack in ROAD & TRACK or CAR AND DRIVER are likely to be more targeted than AdSense ads for the keywords "tires" or "snow tires" are, because they're reaching an audience of car enthusiasts, not just anyone who happens to be looking at a page that contains "tires" or "snow tires."
Realistically, though, video ads aren't likely to be used in the highly "grantular" way that contextual text ads are, just as TV commercials aren't used for keyword-targeted direct marketing. Still, it's certainly possible that a video ad for, say, Home Depot could be bought on home-improvement sites, in the same way that site-targeted CPM display or text ads are bought now. I know of at least one vertical ad network that's running video ads, so why not Google?
why not news international, why not NBC, why not ABC, Why not Paramount pictures?
Thats one point the article appears to address
|absolute spending on search advertising will continue to increase |
No question. I hate video-embedded ads and think they're a colossal waste of money, but what do I care if some advertisers adopt that medium?
The article guesses that the overall online advertising pie will almost double by 2011, so a "market share" drop from 40% to 32% seems trivial compared to that.
>>Absolute spending will continue to increase,<<
This is actually a very neutral comment in the article,
Inflation usually means that an absolute increase, might mean a relative fall.
For overall advertsing expenditure to increase, the whole world economy would have to increase,
In the long term, decades, that ought to happen, as more generation go out to work, world pop increases, etc etc
But, imediate term 5 years, 10 years, who knows
Thing is to pay attention, methinks anyway, open mind an all that :)
|I think its a serious article written by serious people who should be taken seriously. |
Are you serious?
I know some of the people that work for these places, and most of their long-term guesswork makes the quizzes in Cosmopolitan magazine seem like quality research. They are pretty good at telling you what next year's market for DRAM will be, as long as the economy doesn't make any major turnarounds, but anything more than that and they are no better than anyone else in the business.
I think the analysts miss the point that TEXT ADS are about the only form of advertising most people simply don't block these days because TEXT ADS aren't completely annoying.
Do these so-called experts think that flashing and distracting video ads are going to get passed the ad blockers any better than the flashing and distracting graphic banners?
I think the technology is nifty but the market for it is dead out of the gate.
|I think the technology is nifty but the market for it is dead out of the gate. |
I'm not so sure about that.
DoubleClick delivers a LOT of rich media ads. Billions per day. I'm sure Google bought them for more than one reason but just looking at the rich media reach the buy sure is a good way to hedge a bet that video ads may just take the lead in the future.
|But ads for The Tire Rack in ROAD & TRACK or CAR AND DRIVER are likely to be more targeted than AdSense ads for the keywords "tires" or "snow tires" are, because they're reaching an audience of car enthusiasts |
Can't really agree with that. Experience shows that a decent percentage of people doing Internet searches are actually shopping - somewhere in the high single digits would be my guess. People subscribe to magazines for their reading pleasure, but their tires only wear out every few years. There may well be plenty of people hanging out in car discussion forums who aren't shopping for anything, but I was thinking more about Google search and organic traffic as opposed to those websites that function more like traditional media in forming static audiences.
Well, i think they're better qualified than you or I to report on the mechanics of the financial world for one thing
For another, they put their reputation on the line constantly
They are a proper company, not beholden to a single supplier
They are as entitled as anyone to go crystal ball gazing
That is , who knows, but at least their opinion , theoretically , should have more standing than the largely self interest driven commentary here
mind you, it is in your interest to investigate the possibility that they might be correct, then again , if you already know the answer, an the answer is that my 1 an only supplier will take care off me, well thats a choice too
|Well, i think they're better qualified ... |
One of my product marketing guys went to work for one of these firms and trust me, he wasn't trained to be a future product analyst. He just knew one segment of the market and we happened to work next door to the analyst company.
Yup, the marketing guy working next door, now there's qualifications!
Add one crystal ball, a box of tarot cards, and a Ouija board and he was ready for work.
|Well, i think they're better qualified than you or I to report on the mechanics of the financial world for one thing |
You can think that. You'd be wrong, but you can think that. Their record speaks for itself.
|For another, they put their reputation on the line constantly |
And that's why people that pay attention to their record don't take their mid or long-term predictions seriously. Their reputation for long-term is pretty dismal.
|They are a proper company, not beholden to a single supplier |
They are a company that makes their money selling their opinion at $3k a pop so management can CYA.
I seem to recall one of their big predictions back around 98 was how windows was going to take a larger and larger share of the high-end server market. They just bought in to MicroSoft's hype. Windows still doesn't run on high end servers. Oops.
|They are as entitled as anyone to go crystal ball gazing |
That was my point, they are entitled to their opinion, but their record shows that their opinion isn't any better, and often worse than the opinion of any person active in the industry.
They are in the business of selling reports that tend to be forgotten by the call date. The way they sell their reports is to make them interesting and controversial. Sort of like the New York Post or the National Enquirer.
Of course, that is just my opinion, which you don't have to accept, because it doesn't have the standing of a company that sells their opinion.
Video ads targeted to geographic regions, demographics, or subject matter still puts video ads somewhat in the same category as television. Other then a few anomalies like my mother in law who foolishly buy from overpriced items from TV channels like QVC, people don't use television or online videos for intent of researching or buying something, right now video is all about entertainment value. Give online video a few years to mature and we may see a large enough influx of online educational videos to the extent that web surfers could reliably start turning to video search for product information, reviews, price research, etc. Those types of videos could represent a great targeting opportunity for small to medium sized advertisers looking to sell products with video ads.
Video ads? Video ads!? Are you kidding?
I really have not seen one extensive study to prove these are either working very effectively now or in the future. Google, for goodness sake, is still Beta testing video ads. From everything I've read on WW by Adsensers trying them, the fish aren't biting.
A week or two ago, I Googled online video advertising case study. Found almost nothing. See if you can do better.
I see no basis even for predicting video ads will become hot. Animated ads suck, and video is animation. Granted most .gif ads are designed by talentless geeks without a creative bone in their bodies, but I've seen no huge response on this board from Adsensers saying they do better or particularly well with graphic ads instead of text ads. My own experience is that almost nobody pays attention to graphic ads.
So why would video ads do any better? Websites are absolutely the wrong medium for video ads, IMO. They're like flies that you have to keep swatting. Annoying interruptions.
|but I've seen no huge response on this board from Adsensers saying they do better or particularly well with graphic ads instead of text ads. |
This is because 'AdSensers' have been conditioned to think 'contextual' text ads only. And the way Google implemented the video ads doesn't allow publishers to make as much money since no one wants to click an ad just to watch a commercial.
But, video is geared more towards branding and not direct response so for Google to try to mix the two together is just dumb. I think they've since realized that and made the DoubleClick deal happen. They know, as well as a lot of us, that the Internet does not have to be a pure direct response play.
Video will never compete with text ads in the direct response world (unless you can create an interesting infommercial maybe) so it has to be viewed as a different critter. Brand advertisers have never really had the success that direct response has had on the Internet but they keep trying which is what I think the article is trying to say. Branding efforts will not subside but will continue to grow as it is hashed out.
Those search ads and contextual ads assume someone is in a buying mode but honestly...I think the majority of people who go online don't do it just to buy something every time they go to a web page...maybe I'm wrong?
|Those search ads and contextual ads assume someone is in a buying mode but honestly...I think the majority of people who go online don't do it just to buy something every time they go to a web page...maybe I'm wrong? |
The way you phrase it, that's obviously true. But in general, it's been well established that Google's ads work, in fact work extremely well. You don't need to be buying something every time in order for the system to work.
OTOH, there are lots of sites (YouTube, say) where people don't have any intention of buying anything. In those cases, the alternatives are branding ads or simply upselling users with one-off perks or a recurring membership status. I personally think that upselling is the smarter choice and will remain so for the foreseeable future.
|You don't need to be buying something every time in order for the system to work. |
That is true and I wasn't trying to say it wasn't. But there are a LOT of pageviews without a click. So in an ideal world those pageviews could/would be filled with branding ads. Since we don't know who will buy and when it can't ever be an ideal world but we do know the percentage of clicks that convert is very low. High enough for the 'system to work' maybe but still very low.
Branding doesn't require a click so it has a very good chance to take the lead over direct response contextual text ads...if it can be done right. Google required a click with video ads. That won't ever work.
I thought the big deal about AdSense when it came out was that research found people were more likely to pay attention to text ads while they avoided looking at banners and especially pop ups.
Except in some rare circumstances (people like to be able to see a trailer on a movie they are thinking about seeing) people won't want to be bothered with video ads. It takes time to watch one and surfers are not that patient.
hmm but what about people all over the world who don't have have fast modems. The video advertisement does not even begin and the person has already read the article?
The video ad market is very young, and it may take some time for internet connections alone catch up. The numbness people seem to have towards "interactive" ads or more accurately put, "invasive" ads, but that may change if video ads were as targeted as current adsense contextual ads (it's going to take a much much larger inventory of video ads for that to happen) I still have faith that the medium could grow over time, but for video ads to displace text ads (especially contextual text ads) in the near future is rather amusing.
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