PREDICTION online media prices in 2007 will rise for non-traditional placements

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PREDICTION online media prices in 2007 will rise for non-traditional placements
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Many companies issue pronouncements of % growth/fall in ad spend. For example, here’s the latest from Aegis (as of writing, 11 Jan 07): www.aegisplc.com/aegis/groupinformation/new-gro.asp#10dec06 I see how, big picture, these are useful for financial analysts and as one of many inputs to overall marketing budget setting. But, just because the market average is to increase ad spend by Z%, and to spend X% of your budget on TV and Y% online, doesn’t mean that’s the right answer for you. Sometimes averages can be misleading as they can mask big underlying differences. How to allocate your media spend should be determined by the relative opportunities and ROI’s of the different mediums FOR YOUR BRAND. This is as much a function of the creative & strategic ideas you have as it is a straight comparison of media cost per “reach”.

That said, however, it’s still useful to have a feeling for trends in terms of underlying media costs. It’s especially interesting in the online world because it’s changing so fast. A way I like to frame the question is… what change will there be in terms of “bang for my buck” invested in online media, were I to invest in similar activities this year to last? I’m not close enough to the coalface on media buying to be able to make judgments myself, so I sought input from various others in the Isobar network who are.

First, here’s a perspective from Andy Cocker, Director of Trading for Isobar UK, for ‘traditional’ online ad placements:
“Online media costs will increase for some sectors and clients, but stabilise or fall for others. As online media becomes more niche and specialised, small self-contained markets are emerging where demand exceeds supply and thus prices are rising. These include premium inventory for finance, automotive and travel. However in less premium areas there is much less pressure on prices, as the growing number online and time spent online increases general inventory.”

Increasingly though, marketers are innovating and investing in non-traditional placement options. For a perspective on this, I turned to Dave Hompe, Director of Media for isobar Global, who amongst other things has led on a number of non-traditional initiatives for adidas:

“Non-traditional digital media options are seeing an influx of big brand advertisers, and this is one of several factors driving prices up. Take gaming, virtual worlds, and social networks for example – buying time in these spaces is increasingly more expensive as properties recognise the value of their offering, their ability to target audiences improves, and they learn how to present and sell this space. As a result brands must look for alternatives. These alternatives exist, but can only be capitalised on through close market monitoring and flexibility in tactics. A great example of this was Mentos and their YouTube competition – a consumer generated video contest viewed by many. Not all approaches will work, but the risk associated with failure of a digital tactic vs the risk of continuing to invest in traditional channels which have increasingly less impact surely is lower. The changes equally are having a fundamental impact on agencies, with traditional media commission models no longer applicable and changes in staff skill-sets required. Overseeing the implementation of non-traditional placements often draws as much on project management skills as it does on planning/buying expertise. Overall 2007 is shaping up to be a very interesting year in the digital, non-traditional advertising space. ”

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This is part of a series of predictions for 2007 developments, prepared jointly with my colleague, Dan Calladine, for Isobar Global.

Opinions are ours personally and do not necessarily reflect the viewpoint of the Isobar group.

Image CC www.flickr.com/photos/subconscience/139205316/ thanks to subconscience.

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