The Future is Now

From Digital Games to Music Downloads, Online Advertising Opportunities Continue to Expand

Online advertising is changing the rules of engagement within the advertising industry. As more and more companies question their current marketing mix, expenditures and return on investment, online advertising gains power and pull. Here, industry expert Mike Ferranti, chief executive officer of New York’s Search Engine Optimization Firm, Endai Worldwide, answers some frequently asked questions about the merits of online advertising, the future of online and offline media and hottest opportunities in the market.

Q: What are some of the major trends in online advertising?

A: Search is becoming the dominant form of online marketing, increasing the sophistication of search engine results and content as well as the consolidation of industry players. Market pricing will function more like network television, although the web still remains the great equalizer: Small business will continue to buy a significant share of online advertising because it’s effective, easy to buy and the same medium used by the big boys. Because of its inherent measurability, online advertising is already having an effect on the accountability of all advertising.

Q: Has online advertising achieved its peak potential?

A: It’s already taken off, most dramatically a year or so ago. It was also consumed by entrepreneurial direct marketers—Endai Worldwide was among the first—that figured out economic models after the easy money exited the marketplace. Many of these upstarts have had to evolve into far more sophisticated players, as the market and competition have grown and matured. We’ve had to invest heavily in technologies to stay competitive and provide clients with increasing value.

Q: What advantages does online advertising have compared to print, for example?

A: In most ways that impact the bottom line, online outperforms print media. That is not to say print media is without value, but as the marketplace grows more digital (and therefore more accountable) the ability to track, measure, and optimize the results generated by media are difficult to beat. Print’s strengths include highly targeted or niche audiences and the business-to-business sector, though search is impacting that as well.

Q: What are the opportunities for specific markets, such as the real estate industry?

A: Real estate is a big opportunity and the majority of decisions today are already influenced by online content and advertising. The challenge here is in capturing and organizing oceans of data, images, and entities in a super fragmented industry that is eminently localized. Sounds like a sweet market for a Google invasion, but upstarts like Zillow are doing a great job.

Q: What other areas of online advertising would be smart to invest in? Are there any areas that are untapped?

A: Online video is growing fast, but barely tapped. Online music and audio advertising opportunities are also hot. While Apple and pirated music dominate, upstarts like Soundpedia are taking the music world in a new direction and have a real plan to optimally leverage online music (which is likely to converge with online video as an ad vehicle). Another area is specialized local price and quality shopping engines–at least those that the major search engines index favorably–generally due to strong focus and a good SEO (Search Engine Optimization) team.

Q: What online advertising listings do you predict will be popular in 2008?

A: Yahoo, already a monster in the category, will make significant strides in 2008 and 2009. Despite some organizational issues, they have some excellent people, as well as the wherewithal to pull together a high-performing set of online advertising vehicles in an exceedingly scalable manner. Also Yahoo Search is improving but is still not as easy as Google AdWords. Yahoo’s acquisition of Right Media was a boost for smaller shops, as the auction model they implement allows savvier online advertising buyers to potentially outperform larger rivals cost effectively.

Q: What about digital game ads?

A: In-game advertising is getting a lot of traction. When you consider there is a generation that thrives on high-end video games, IM and text messaging, it’s easy to see why these ads have great value. Game consoles are turning into living room PCs on the web, They stand to dominate the attention of an exceedingly valuable demographic.

Q: Where does online advertising fall short?

A: Overall, online advertising offers a major opportunity for marketers. The weakest link lies in its strategy and execution. Focus, and working with people who are experienced in pulling together a solution either in-house, outsourced or some combination is the first step. Do the homework, keep expectations realistic and focus on learning about how a product or business responds within the online medium. The same advice applies for marketers already in the medium that are seeking growth of their programs and results.

Public Relations Contact: Rosica Strategic Public Relations

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