McG

Some Predictions for Online Advertising in 2009

thoughtful piece. Agree that the space is going to blow up and the acceleration of shareshift from non digital to digital will increase. Disagree on a couple key points.....

1. You say, 'Yes, crappy sites with crappy inventory will have to accept advertisers’ requests for performance-based pricing models (CPC, CPA) but the premium sites will never accept this. They don’t have to.' This is not correct. Where do you think the largest networks get their inventory? It's from the largest branded sites, and the majority of their business is performance oriented. It will actually go the other way. Large branded sites will offer performance pricing when the data they have enables them to drive a higher yield by taking the CPA/CPC. Smaller sites with supply constraints like auto and tech sites may shy away b/c of resources and lack of experience but these are the exception to the rule.

2. Display is not dead by a longshot, but you will see significant enhancement to the targeting and use of data in display to make it more relevant than the 'spray and pray' method many use. Also, too much rev is based on this, so publishers will move very slowly.

1 and 2 are slam dunks.

3. video vs search - not sure abt your prediction. no clear model beyond preroll or interstitial has taken hold. Not sure what 'will overtake' means either - revenue or search query volume? Re: revenue, video CPMs are high now and will continue as long as there is supply shortage of quality video inventory. Re: query volume, maybe but they are different and hard to compare - search is about information gathering and transaction. Video is less transaction, more information/entertainm... and branding.]

McG