How Social and Mobile Will Disrupt Online Advertising

It’s no secret that online display advertising is going through huge changes, thanks largely to the fact that banner ads have never worked very well. Everyone from Google to Facebook to Twitter to a gazillion ad technology startups is trying to figure out something that will work as remotely well as search ads. So I’m always interested to hear how smart folks think display ads will evolve. This morning a panel at the TechCrunch Disrupt conference in New York, which I’m watching by its livestream, will be exploring this. On the panel: former Yahoo/Right Media’s Mike Walrath, now with Moat, a “search engine for display ads”; Carolyn Everson, new head of advertising at Facebook; Eric Litman, CEO of mobile ad platform Medialets; and Gurbaksh Chahal of ad network RadiumOne. TechCrunch editor Erick Schonfeld is moderating.

Q: Is the online advertising we have now sufficient or broken? Walrath: It’s broken, the way we’re delivering it to marketers is fundamentally broken. Two things are bullshit: that usage of the Net will drive brand spending; and that if that doesn’t work, sight, sound, and motion (video, flashy stuff, etc.) will solve it. Neither will.

Everson: For 10 years, every digital company has been trying to say you should move more advertising online, and they haven’t figured out why it hasn’t. TV is still strong. You have to get the creative community comfortable with digital advertising. They do not feel comfortable enough with the medium to bring more advertising to the Net. Can’t just offer a billion little boxes.

Q: Don’t online ad budgets have to take from TV? Litman: To think that dollars are not flowing in, that’s an argument from 1998. There are dollars available to come from traditional media.

Walrath: We’re having the wrong conversation–the latest whiz-bang way to target an ad. Just incremental. Until we change the conversation, we’re going to be battling for table scraps from traditional media. Channeling Wenda Harris Millard (who famously said years ago at Yahoo that online ad companies needed to do more than sell the ad equivalent of pork bellies, meaning banners sold cheaply by the ton)… We need to show purchase intent and brand recall. Otherwise, the conversation is meaningless. (Amen!)

Chahal: Disagrees (not surprisingly). Display advertising works. People want to spend more money. You can make that multibillion-dollar display industry better. Everson: The top brands care about the social graph. 50 million “Likes” per day happen on Facebook, which drives Facebook’s latest ad offering, called “Sponsored Stories,” which turns Like and other actions into ads on Facebook.

Q: To what extent does mobile and location help brands? Litman: I don’t need an ad to tell me there’s a Starbucks near me. That’s not the model for local advertising. It’s really much more defining where people are within a store, walking down an aisle, and using a tool to compare products; the brand can pay slotting fees to get their products in those tools. We’ve seen a bunch of search dollars coming into mobile. Walrath: Most mobile ads I’ve ever seen have been a shitty experience. Can’t just show ads–they need to be intrinsic to the apps being used. Chahal: Mobile ads are still pretty new–$550 million last year.

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2 Responses

  1. This just goes to show how important seacrh engine marketing and seacrh engine optimization are to a comprehensive and strategic marketing plan. Fifty-two percent is too large for any company or marketer to ignore.

  2. How Friendly and Mechanised Module Discontinue Online Business. Posted on May 24, 2011 by robhof.

    “Online Advertising”

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