Why budgets are shifting to audience-centric buying
We’ve seen countless downward revisions in the overall ad spending forecasts for 2009. The economic slowdown (I still hate to use the word “recession”) has not only impacted the most vulnerable sectors like newspapers, magazines, radio, and television. Even online display is now forecast to be no better than flat year-over-year.
And it’s not only the ad economy that has morphed rapidly. Agencies and advertisers are rethinking tried and true planning and buying tactics in search of alternative, complementary ways to reach their target audience with greater reliability and efficiency. I refer to this change in buying behavior as a shift from site-specific to audience-centric buying. At the center of this phenomenon in the display ad market are ad networks, offering target audiences to brand advertisers in the form of behavioral, demographic, lifestyle, and contextual segments versus simply sites and/or sections.
If we take a close look at how display ads were sold in 2007 compared to 2008, I think we’d find a greater percentage of display ad spending in the audience-centric or people versus pages year-over-year. For example, of the $8 billion spent on display spending in 2008, I’d estimate that approximately 30 percent or $2.4 billion fell into the audience-centric category, while the majority (70 percent or $5.6 billion) was bought in the more traditional site-specific way.
With the ad market in disarray, and agencies and advertisers looking to stretch their ad dollars further, we can expect a continuing shift toward audience-centric buying. I predict that this will stabilize closer to an evenly split balance over the next two years. If this is the case, while overall display ad spending may be flat, the audience-centric segment would be growing very rapidly, even faster than search.
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