Trends in online advertising

Citation

(2010), "Trends in online advertising", Journal of Consumer Marketing, Vol. 27 No. 5. https://doi.org/10.1108/jcm.2010.07727eab.002

Trends in online advertising

Article Type: Internet currency From: Journal of Consumer Marketing, Volume 27, Issue 5

Dennis A. Pitta, University of Baltimore

Traditional advertising media have been decimated in the last few years by inroads by online competitors. The confluence of connected millennials, increasing Wi-Fi and wired internet access, as well as existing consumer preferences for ease and convenience have created the perfect storm that continues to attack each of the traditional media. Companies that did not exist ten years ago, like Facebook and Twitter, now overshadow traditional publishers. Newspapers, for example, which have been traditionally the most important media in terms of dollars spent, have been dying at an alarming rate. Major cities that boasted multiple newspapers are now struggling to cope with just one. The survivors have been transformed into shadows of themselves. Even the prestigious and successful Washington Post survives as a lightweight offering containing fewer ads and less content available just a year or two before. As a result, more newspaper jobs are in jeopardy and content continues to shrink. One more example is the classic magazine, Businessweek. It sold recently to Bloomberg for less than $5 million (plus assumption of debts). A contrasting example is Gowalla, a location-based game developer. Its application allows users to visit a geographic location and collect tokens. While it is one contender in a nebulous location-based game market, it sold a minority stake for over $8 million at roughly the same time. I guess we are not in Kansas anymore.

Traditional broadcast radio and television have seen their advertising revenues shrink as well. However, they are not going down without a fight, giving new emphasis to new communication alternatives. Recently, the trend toward product placement in traditional advertising may have reached its zenith. A popular US television show, Bones, featured two actors driving in a Toyota Sienna minivan. One remarked that the car seemed unsuited to the driver, an attractive single woman. Her response was that, as an artist, the Sienna possessed sufficient room for her canvases and was still a fun car to drive. Writing the product into the dialog beyond a simple, “May I have a Coke … or a Pepsi” seems to be a breakthrough. Innovative it may be, but it is still just tweaking a traditional medium.

Social media represent a sea change for proactive marketers. They approximate a two-way one-to-one marketing message. The description is complex, but it is accurate. Social media offers a word of mouth rich message to a relevant audience, which is the one-to-one element. In addition, it allows advertisers to monitor consumers’ reactions to the message: the two-way element.

The trend toward social media is not surprising when one considers the advantages in reach, specificity of the new media and associated trustworthiness of the communicators. Advertisers have migrated their budgets to media that capture their markets more effectively. To reach target individuals, increasing numbers of advertisers have embraced non-traditional and social media.

Whenever a new marketing tool emerges there is a need to master it for the highest level of effectiveness. The challenge to traditional advertisers is learning the benefits and limitations of social media as well as when, where and how to employ them. Cutting edge agencies have bolstered their staff with new media experts and have tried to become the information resource of a range of advertisers. The trend has also spawned specialized media companies that provide social media and social networking approaches to advertising. Those media companies have mastered search engine optimization and blogging. However, they face an ever-changing landscape of new consumer behaviors. Among them are the above-mentioned location-based services, the proliferation of mobile devices and the intermediation of social forces. The changes revolve around social media as a vehicle for producing content. Social media started about ten years ago with rudimentary tools like the customized greeting cards supplied by Blue Mountain Arts. Consumers could send their friends electronic cards via e-mail for events ranging from Christmas to Chinese New Year. They became popular because of a selection of multimedia templates that allowed personalization with a professional look. Over time, competitors supplied systems that support broader and subtler social interactions. They focus on creative communication tools that individuals can use to publish their personal information like pictures, changes in status, tweets and other messages. In addition, social media created new distribution models that enable individuals to share their personal information among friends.

One such organization that attempts to master the new focus is aptly titled, Socialmedia.com

Socialmedia.comwww.socialmedia.com

Socialmedia.com describes itself as the largest independent social media advertising company. It has experience in delivering ads to “over 40 million people each month, within 5,000+ applications running … ” on popular social media platforms like Facebook, Myspace, and individual web sites. The company’s focus is to make advertising more relevant.

Recognizing the added consumer involvement that social media can create, Socialmedia.com provides a number of products that enhance the advertising message. Its products exploit the strengths of social media by using a See-Share-Syndicate model. For example, the simplest overlays a social veneer to existing advertisements. Socialmedia.com provides a real example, a web site display of an original advertisement for Windows 7. The overlay presents three relevant features of the software. First, viewers see and can pick what they think is the most important feature. Second, they can share their feelings about the feature with their friends and social community. The third stage is most important. Socialmedia can count each vote and can syndicate the message to a viewer’s social community. Thus, the viewer creates the content of the syndicated message.

Socialmedia.com uses the same framework in its other products: social interaction advertisements, friend-to-friend advertisements, Twitter-enabled advertisements, video advertisements and community polls. The common thread is a viewer experiencing and ad and choosing to share his comments with his online community. One of Socialmedia’s benefits is the quantum improvement in communication: syndication to the greater group consumers in the online community. As noted above, it takes real messages from real people and transforms it into sponsored content. There can be many messages. The trick is to choose the right message that communicates the most relevant message to individual users. Socialmedia.com employs two techniques: social influence ranking and self-learning optimization to select the specific user message. The company states that it is unique in providing publishers with custom, social advertising solutions that can help them to maximize the value from their target communities.

One requirement is to avoid the current homepage-takeover distraction tactics of traditional online marketing. It is analogous to our product placement gone amok example linked to Bones. Our personal internet service provider changed the nature of our e-mail account recently. Using the reason that the security and utility of our accounts would increase, we are subject to a panel that opens when we open our e-mail inbox. The mail is squeezed to the left while all sorts of advertising messages pulsate on the right. We have found ways to block it just as broadcast audiences have learned to avoid commercials. A key difference here is that typical social media users focus on real messages from real people: there are no “ads” to avoid. The challenge to agencies is to learn how to produce advertising content that can be shared in numerous ways by different social groups while preserving some underlying essential brand equity. Social media presents a vast advertising opportunity and advertisers can benefit from a solution that works well and can be scaled up to a large target audience. Companies like Socialmedia.com can offer solutions that for the first time enables advertisers to buy positive “word of mouth” about their products and brands. That accomplishment helps to validate their value.

In our next issue, we will investigate other informative sites and invite readers to submit their favorite internet sites for our consideration.

Reader requests

Please forward all requests to review innovative internet sites to: Dr Dennis Pitta, University of Baltimore, 1420 North Charles Street, Baltimore, MD 21201-5779, USA. Alternatively, please send e-mail to: dpitta@ubalt.edu for prompt attention.