Monetization, B2B, and Technology: 2013 Predictions for the Online Advertising Industry

Posted By Jeremy Bloom On January 7, 2013 @ 10:28 AM In Ad Networks, Ad Serving | 1 Comment

The online advertising industry is a rapidly evolving sector, and has drastically changed over the last several years. With increasing opportunities for brands to reach their target audiences across multiple channels, the sector will continue to change as advertisers look to create more seamless ways to engage with these prospects.

Below are a few predictions that I expect to take place in 2013:

Monetization solutions will flourish:

Wherever you have a captive audience, there’s an opportunity to make money. And there’s always some genius that finds a way to capitalize on specific audience venues: sports stadiums, mobile apps, even gas pumps and bus benches. In the rapidly evolving industries of advertising and ad tech, new ad formats, channels and types of messaging spring up on a daily basis.

In 2013, we’ll see this trend blossom towards monetization. Older digital formats like banner display ads will receive a boon from monetization solutions like Lijit [1], recently acquired by Federated Media, to both optimize their portfolio of publisher partners and provide additional value to advertisers.

The developments in mobile marketing have created even more opportunities for innovation mavens, reshaping the look and feel of mobile apps for consumers and business-to-business (B2B) prospects alike. Trulia [2] offers excellent desktop experiences and mirrors its user interface (UI) across all versions of its mobile apps. Trulia’s monetization system allows consumers to connect to real estate agents immediately; mobile app publishers will follow this trend, connecting users to content providers while optimizing the user experience. Self-service mobile ad partners like Millennial Media’s mMedia [3] will provide significant additional revenue streams for apps with substantial traffic.

Native advertising will be the fastest growing monetization solution this year. For those unaware, native advertising goes by a few definitions. CEO of Sharethrough Dan Greenberg refers to native advertising as “a form of media that’s built into the actual visual design and where the ads are part of the content,” while Deep Focus CEO Ian Schafer defines it as “advertising that takes advantage of a platform in the ways consumers are actually using it.” The most prominent current examples are Facebook’s Sponsored Stories and Premium Ads and Twitter’s Promoted Tweets, but look to a greater number of media sources and networks like LinkedIn and Pinterest to partner with native ad platforms like Sharethrough [4] to offer advertisers a valuable method to deliver good content without interrupting consistent user experiences.

Apple will join the B2B battle:

Apple continues to churn out consumer electronic devices as fast as the company’s fan boys and girls can scoop them up, and the company has been synonymous with simplicity in design without compromising performance or aesthetics. In the tablet and app markets, Apple is second to none, totaling over half of tablet shipments worldwide in Q3 2012 [5] and commanding nearly 80% of mobile app store traffic in H2 2011 [6]. Despite slow market share gains in the smartphone and PC product categories, Apple will revamp its marketing strategy in 2013, moving beyond predominantly B2C marketing to include SMBs and enterprise businesses.

When you’re at the top, everyone is gunning for you. The success of the iPhone and iPad compelled Samsung, Microsoft, Nokia and Asus to overhaul their product portfolios, offering Apple-like gadgets at more affordable prices. Now, with bring your own device (BYOD) becoming such a hot topic in enterprise business, expect the same to happen across the B2B market.

While Apple’s current business offerings aren’t particularly extravagant [7], they embody Apple’s approach to consumer electronics, with a focus on connecting features to benefits to values for the end user. Leading business computing companies tout hardware specifications that may seem foreign to many non-tech-savvy individuals in the B2B world, which isn’t a problem if their ads are only targeting IT decision-makers.

However, Apple thinks different. Apple knows consumers are also business buyers, influencers and decision-makers and will tailor marketing messages to specific audience segments to drive increased adoption of its business line of products. The App Store will be a huge selling point for B2B buyers, as it offers custom-built apps to address business processes specific to client partners. In 2013, look to Apple to capture a greater share of the mobile B2B market through aggressive marketing of the App Store and Apple products’ greater perceived relevancy to essential business functions.

Technology will dictate success:

Ad networks that are lagging in tech advancement and user experience (UX) improvements will fold. Likewise, major brands will leave their AORs to take their marketing in-house or to technology partners that will do the work of agencies for a fraction of the cost.

According to a recent CMO Council report [8], just 12% of CMOs surveyed found their agency partners to provide value. The manual tasks for which agencies typically collect 10-18% commission are being replaced with automation. Similarly, brands are moving from large, rep-driven firms for their marketing to self-serve technology platforms like OpenX [9], Lijit and AppNexus [10], effectively keeping marketing an internal function. This facilitates real-time campaign oversight and optimization, increases marketing accountability by keeping campaign management in-house, and lowers both the cost and risk of running campaigns through unfavorable publishing sources.

In 2013, we will continue to see the evolution of brands moving away from ineffective ad networks and costly agencies, which means that high-profile players that do not acknowledge this change and innovate accordingly will go out of business seemingly overnight. In the next year, marketers should identify the game-changing technology platforms and begin developing workflows and specific tactics to incorporate these technologies into current marketing strategies.


URLs in this post:

[1] Lijit: http://www.lijit.com

[2] Trulia: http://www.trulia.com/

[3] mMedia: http://mmedia.com/

[4] Sharethrough: http://www.sharethrough.com/

[5] shipments worldwide in Q3 2012: http://totalaccess.emarketer.com/images/chart_gifs/147001-148000/147186.gif

[6] store traffic in H2 2011: http://totalaccess.emarketer.com/images/chart_gifs/137001-138000/137841.gif

[7] offerings aren’t particularly extravagant: http://www.apple.com/business/

[8] CMO Council report: http://www.cmocouncil.org/images/uploads/249.pdf

[9] OpenX: http://www.openx.com/

[10] AppNexus: http://appnexus.com/

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