Web companies are collecting personal data about web surfers to predict relevant online content and advertisements.

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Google acquires the online advertising giant DoubleClick after receiving green light by the European Union.

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According to Nielsen Media Research, this Super Bowl was the most-watched ever, with a record 97.5 million viewers. This kind of audience does not get lost on advertisers, of course, and explains their readiness to spend $2.7 million dollars for a 30 seconds spot.

Fox tried to maintain a semblance of objectivity and declared early on that it would decline ads from political candidates. It should be noted however that about 15 to 20 percent of Super Bowl ads go towards promoting the network’s own programs, or an equivalent of $46 million in ad spending. . .

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In 2007, local online advertising was an $8.5 billion market. Analysts are announcing a 48 percent increase in 2008, bringing it to $12.6 billion. Internet companies understood what significant adjustments it takes to lead the local online advertising market. Newspapers are going down and losing market share.

Pure-play Web companies now have the largest share of the local online-ad market. A pretty significant turn over for newspaper companies who were enjoying a 44.1 percent share of the $8.5 billion local ad-market, and are now down of 10.7 points which let them today a 33.4 percent share. Internet companies have now 43.7 percent of market share, according to Borrell Associates, a consulting firm that tracks local advertisings. (Directories such as the Yellow Pages have 10.1% and local television outlets 9.3%)

Newspapers are feeling the biggest effects of this competition.

Online-ad revenue at newspapers made up no more than 7.1% of total revenue in the third quarter of last year, according to the Newspaper Association of America.

“Newspapers are tied too closely to defending their print products and have not seen the Internet as an innovative and competitive tool to go out and compete,” explains Gordon Borrell, chief executive of Borrell Associates.

Web companies now rule the market for local ads online, forcing newspaper publishers to rush to change the way they sell ads.

The majority of the radio stations and TV stations, newspapers, cable companies, are still pinning their hopes on their traditional sales teams being able to specialize in the digital market, and create and sell new online ad packages.

An explanation coming from the Wall Street Journal could be the following: Local media companies, because they are based in the communities they serve, would seem to have an edge over Internet sellers when it comes to persuading the diner or corner hardware store to take out an ad. But they have largely failed to convert that advantage into sales. Instead of tailoring their sales to local businesses, many newspaper companies initially focused on selling ads to bigger advertisers who were already buying space in their print products.

While this strategy allowed them to quickly and cheaply create a customer base for their online ventures, it also limited their growth, because they weren’t expanding their customer base.”

“Many newspapers also hurt themselves by simply plopping their papers online instead of creating new Web sites that offered advertisers something they couldn’t get in print. Meanwhile, Web companies such as Google and Local.com are growing rapidly because they have made it cheap and easy for local companies to take out ads,” says Journalist Emily Steel.

What will become of the local online-ads market in 2008?

The popularity of local search and online video advertising will drive most of the growth, confirmed by a recent study from Borrell Associates.

“Key advertising segments for 2008 will continue to be the “Big 3” classified categories of automotive, recruitment and real estate, with online political marketing holding promise for local sites as state and presidential campaigns heat up,” says the report.

More than a year ago, Yahoo! came up with a plan with about six newspapers to establish a nationwide online-ad sales network. Since then, other newspapers have joined the alliance. This year, papers in the alliance aim to sell more-sophisticated ad offerings, such as behaviorally targeted ads, thanks to Yahoo! Technology that they will take advantage of and use on their Web sites.

Meanwhile, 300 newspapers, recently represented by a group of 11 newspaper companies, formed a partnership with real-estate site Zillow.com to strike into more real-estate classified ads.

So what we expect for this coming year are papers making the decision to form and join more profound alliances with their major competition in order to survive. And even thought giant Internet companies are starving for the growth they observe in the local market, they are also finding benefits to partnering with local media businesses to reinforce their own efforts.

But with a spending for local online ads expected to grow 48% next year to $12.6 billion, the opportunity is still there for newspapers. And what could be necessary is a greater investment in an independent online sales force that would continue the growth these properties have enjoyed for the past few years.

Mathieu Ramage
Media and Editorial Manager of Atelier

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Introducing the new iPod Touch commercial, by Nick Haley

Nick Haley’s original version:

Apple’s repolished version:

“Where there used to be ABC, there are now a million publishers.” That’s how Joe Marchese, the founder of Archetype Media, an upcoming platform that will deliver brand advertising to social media, describes the challenge facing advertisers and their agencies.

Isabelle Boucq for atelier

Joe Marchese, who shares his views as a weekly guest blogger on Online Spin, is aware that this new deal is hard for brand advertisers to grasp. “The communication between the advertising buyer and seller has changed. What is it they are buying? There is a lack of currency for the exchange. In TV, getting the buy is the success. Online it is harder to measure that success.”

While major advertisers have so far failed to use the exploding potential of social media according to Marchese, he feels that they are “the natural solution to each other’s problems”, i.e. reaching consumers for advertisers and monetizing their content for social media sites. “Yes, advertisers are being shy. But they have to follow consumers where their attention goes. There is no such thing as a zero risk spot. But the type of influencers you can reach online makes the reward high enough,” dispels Marchese.

“In social media, you have to use pull advertising and you have to be creative,” advises Marchese. Advertising agencies are a key component in the process. “If branding is going to work online, it has to be driven by agencies because they have the ability to deliver the quality that has to be present.” He strongly believes that online advertising has to be engaging in order for consumers to embrace it instead of rejecting it as intrusive.

In a recent post, he encouraged advertising creative types to think like the fashion industry, comparing “the way people personalize their social media profiles to the way people get dressed to go out” and adding “if you want your advertisement to get pulled onto someone’s social media profile, perhaps you should start with a question: Would I ask someone to wear this creative on their shirt when they are (depending on the social media) in public/at work/with family?” Continuing with the fashion analogy, Marchese warned advertisers that “One size does not fit all….. Add to the choices the ability to personalize, and you have yourself a social media creative strategy.” 

Archetype Media has been holding meetings with agencies and advertisers for some time to present its future platform which Marchese expects to unroll in the next couple months. “The idea is to create a new system of distribution into social media with new metrics that will allow advertisers to plan future online and offline campaigns,” says Marchese.

In the company’s marketing spiel, here is how the promise comes out. “Because Archetype’s delivery is based on scalable targeting technologies, we provide unprecedented social media reach, scalable social media buying and ground-breaking measurement of brand campaign effectiveness. Archetype represents a single point of contact for agencies and advertisers, while tailoring unique integration and monetization solutions for each social media partner.”

One challenge facing online brand advertising is metrics. But Marchese thinks that it could be turned into an advantage by new media. “The ability of new media to create a dialogue with massive audiences should already enable us to measure branding metrics to a degree of efficiency never before possible. In fact, the ability of new media (and social media in particular) to deliver real-time market feedback on brand perception and brand creative effectiveness can not only help to create more efficient markets for brand advertising online, but it could very well prove to be the tool advertisers are looking for to improve efficiency in their advertising efforts through traditional media. Imagine the ability to support creative and buys for television based on your social media,” he writes on his blog.

Isabelle Boucq for Atelier

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With consumers spending more time online, especially on networking sites and other user-generated sites, advertisers have learned to take their message to these new spaces. It is forcing brands out of their comfort zone into a chaotic online world where they have less control over their image and where empowered consumers can distort their messages. In addition, some companies and CEOs are using blogs to get their views out. Here too, the lesson is that consumers can fire back in a way they never could before.

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 Videogame players get fully immersed in gaming worlds replete with advertising and brand messages.

When Sony launched Everquest II in 2005, it made it possible for captivated players to order a Pizza Hut pizza without ever leaving the game. At the time, the news was widely reported in the gaming and general media as one of the most blatant examples of in-game advertising.

Since then, the interest in in-game advertising or “game-vertising” has not abated. In February, Google entered that market as part of its expansion in all things advertising. Google acquired Adscape Media, a company which “offers dynamic delivery of advertising with plot and storyline integration. Adscape Media supports sophisticated demographic and geographic targeting and also provides a robust reporting interface for marketers” according to a company statement. All the new partners have said is that they are “in discussion with many in the game development community and hope to partner with both large and small game publishing companies.”

The purchase was Google’s response to Microsoft’s incursion in the field of in-game advertising. Last year, the maker of the Xbox acquired Massive, its own in-game advertising arm. The company’s technology tracks gamers’ actions and serve them ads on billboards and signs inside the game. According to Massive, more than 50 titles for the Xbox 360 and the Xbox are now part of its ad network including Ubisoft’s “Tom Clancy’s Ghost Recon Advanced Warfighter 2” and Microsoft’s “Crackdown”. That number is expected to reach 100 titles by the end of the year.

At the time of the purchase, the president of Microsoft’s entertainment and devices group Robbie Bach told news.com that ad messages in games could be very effective. “They get it, and they may not even know they got it,” he said. However he warned, “Make sure whatever you do doesn’t interfere with the game playing experience. Do not interrupt someone when they are gaming. It is a very immersive experience.”

As advertisers struggle to find alternatives to traditional media, games are looking like an attractive option.  It is estimated that 20 million of the more than 25 million 12-17 year-olds in the U.S. are gamers. But more interestingly, videogames are no longer reserved to teenage boys. According to the Entertainment Software Association, the average game player is 30 years old and 43% of all gamers are women, a marketer’s dream.

“Now that in-game advertising has been proven effective, brands with seven-figure budgets for this year have been approaching the major players. This supports the general expectation that the market will grow by 40 percent to 50 percent in 2007. The latest market-size estimates for 2010 range between $1 billion and $2 billion,” wrote Justin Townsend, CEO and co-founder of in-game advertising company IGA Worldwide in a recent column in MediaWeek. Even if Mr. Townsend can be suspected of being over-enthusiastic, in-game advertising is a promising “niche.”

Isabelle Boucq for Atelier

Advertising on mobile phones started modestly. A few years ago, campaigns were tied to TV commercials and required entering a code on the phone to receive a text message. Most early adopters were found in Europe where text messaging has always been more popular.

Since those early days, multimedia-enabled phones that connect to the Web have become increasingly available, making jazzier advertising possible. MMS (Multimedia Messaging Service) can deliver rich graphics, audio and video which make for more compelling ads.

According to figures released in November by CTIA/The Wireless Association, there are 227 million wireless subscribers and 57% of them use more than voice services. Mobiles are so widespread that advertisers can’t ignore this new way of reaching consumers.

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