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January 29, 2008

Advertising Market Disruption According to IBM

You expect a scrappy insurgent startup to talk Disruption. Hearing IBM talking "disruption" is, however, much more amusing. IBM's last report on the media sector is entitled The End of Advertising as we Know It. The report does not pull any punches.

The next 5 years hold more disruption for the advertising industry than the previous 50 years, according to Big Blue. Apparently open advertising exchanges will replace traditional media wholesalers and agencies.

A strong concensus opinion, according to IBM's industry poll, is that open advertising exchanges will take 30% of revenues currently won by traditional media. The figure must be in the 5% to 10% range currently. With Google's adsense leading among exchanges with around 50% of online advertising. Yahoo and Microsoft are desparately trying to muscle in.

The big looser will apparently be the 30 second TV spot.

IBM's solutions for traditional marketing agencies? If you cant beat them, you join them. Buy yourself a new business model and infrastructure (preferably from IBM), and hook into these open exchanges. This is not the first market that has succumbed to electronic trading.

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January 4, 2008

Ad "receptivity" High for Online Video Advertising

Brand marketing has different metrics to online sales marketing. Brand recall and engagement measure the first, sales conversion rates measure the second. New web2.0 web sites, social networks and video sites, are notorious for low conversion rates. New surveys are, however, showing excellent brand marketing results.

A cross-media study, by Experian Research Services, found that viewers are 25% more engaged in the content of TV shows that they watch online than on a TV. John Fetto, product manager at Experian, said that TV ads online are especially effective at reaching consumers.

"Web sites that are extensions of properties that exist in other media channels have great potential to funnel audiences that are highly engaged in the first place," he said

The Simmons study was based on 74,996 interviews with U.S. adults about the TV programs, magazines and Web sites that they watch, read and visit. The survey was conducted online and via telephone between October 2006 and September 2007.

[Via Meadiapost Publications]

[Disclosure: Yes, we are invested in a video and a social networking site. My views may be biased.]

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