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Online Ads: Think Time, Not Eyeballs

Jason Lee Miller
Staff Writer
Published: 2007-01-10

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Online advertising is meeting a crossroad in 2007, shifting from a focus on generic keyword targeting and universal search results to a more targeted, behavioral-based model. Page views and traditional SEO will lose focus, and Google is leading the way on all roads at once.

This is a continuation of an earlier article based on forecasts for online advertising made by Susquehanna Financial Group. Click here for part one.

Usage, Not Page Views

With the rise of AJAX and RSS, the page view is dying. So the focus is shifting from eyeballs to minutes of use for measuring the success of an online property. SFG says that users are spending more total time online as broadband becomes more prevalent, rising 16 percent year over year.

Average minutes per user, a better measure, rose 13 percent. Susquehanna predicts usage rates will grow 10 percent annually as more compelling content is married with advanced search solutions, personalization and globalization.

Together, Yahoo and Google take in 45 percent of online advertising worldwide, the bulk of that spending is on search, which makes up only five percent of users' time overall. But the most striking statistic is that four companies, Time Warner, Microsoft, Yahoo! and Google, collectively command 30 percent of Internet users' time.

The Advent of Online Dayparting

The major search engines have begun offering dayparting as part of their packages, indicating the shift in focus to user behavior. Know who is online, and when, will make a huge difference to advertisers, and will drive the case for adjusting how much they spend online.

"Dayparting is likely to become a standard element of ad purchases online," reads SFG's report.

Add geotargeting, personalized search, and search history records, behavioral advertising will become paramount. Behaviorally targeted ads convert 5 to 10 times better than clicks than non-targeted ads. An Advertising.com study found more than 100 percent increases in ad effectiveness and conversion rates.

Google Leads The Way

From the horse's (SFG's) mouth:

Our analysis finds Google the best positioned among the four leading sites. While Google is not yet as global in its user base or distribution as Yahoo!, it is ahead of its peers in monetizing content sites (including long-tail sites), a major monetization opportunity over the next several years.

Finally, we believe Google has solid early presence in three longer term growth categories - video and mobile advertising and cloud
computing services - although these young markets remain open to competition from new and existing players.

One Major Obstacle

An unexpected part of this report about online advertising was a brief entry on Network Neutrality:

Those promoting net neutrality are focused on preserving an environment that facilitates the growth trends we have detailed; without net neutrality, these forecasts are less achievable.

Essentially, consumers should be free to try new services without constraints - a factor that has enabled substantial innovation on the web to date. These goals are meant to assure the carrier will not take advantage of their control of the physical layer to impose other choices on the consumer.


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About the Author:
Jason L. Miller is a staff writer for WebProNews covering technology and business.

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