Great article about future of advertising

The next 5 years will hold more change for the advertising industry than the previous 50 did. Increasingly empowered consumers, more self-reliant advertisers and ever-evolving technologies are redefining how advertising is sold, created, consumed and tracked. Our research points to four evolving future scenarios – and the catalysts that will be driving them.
Traditional advertising players – broadcasters, distributors and advertising agencies – may get squeezed unless they can successfully implement consumer, business model and business design innovation.

The trends toward creative populism, personalized measurements, interactivity, open inventory platforms and greater consumer control will generate more change over the next 5 years than the advertising industry has experienced in the last 50. This means that many of the skills and capabilities that were the mainstay of success in the past will need refinement, transformation or even outright replacement.
Based on an IBM global survey of more than 2,400 consumers1 and feedback from 80 advertising executives worldwide collected conjunction with Bonn University’s Center for Evaluation and Methods,2 we see four change drivers shifting control within the industry.

Please read full report for more info...
(Source: Berman et al., The end of advertising as we know it, IBM Insitute for Business Value)

Ad Market

• 66% of advertisers plan to increase their usage of ad networks in 2007. (Source: Collective Media)
• A survey from InsightExpress shows 94% of respondents prefer ad-funding to subscription based when watching online video and 63% prefer shorter ads. (Source: NMA 20/09/2007)

Duration of pre-roll ads?

Study: 30-second preroll ads perform best- While many sites are limiting their pre-roll ads to 15 seconds in length, a new study from the Online publishers Association concludes that 30-second ads performed the best. (Source: Matthew G. Nelson, The ClickZ Network, June 2007 http://www.clickz.com/showPage.html?page=3626076)

Online ad revenue

• 2006 Online Ad Spending Hits Nearly $17 Billion - Online ad revenues continue their upward surge, hitting $16.9 billion in 2006, according to the Interactive Advertising Bureau's annual revenue report (Source: Kate Kaye, The ClickZ Network, May 2007 http://www.clickz.com/showPage.html?page=3625959)
• Online ad spend has topped £1.3bn in six months according to the Internet Advertising Bureau's (IAB) 2007 Online Ad Spend report. The sector has grown over 41% year-on-year during the first half of the year, taking £1.3bn compared to £917m a year ago.
  The effect has been that the market for online advertising has grown 14.7%, making the internet the fastest growing advertising medium. (Source: NMA 04/10/2007)

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Video Advertising, Online (banner, text, Flash) Advertising- do they share the same bed?

Online advertising seems to be on everybody's minds these days. Within the Web2.0 craze, marketers are being tempted by the 'social-network' fruit. Whether users are cognizant of their newfound exposure to newfangled advertising methods hides behind the proposition that they'll do something about it.

Google's Adwords technology tied in with their goodness mantra of providing users with advertisements that were actually relevant. Now, the race is on the figure out how Video Advertising will fit in.

Starting about a year ago and picking up more recently, video advertising is getting exciting. Bloggers (SearchEngineWatch, ITNewsDigest, TechCrunch ) have been all over this, and VC's have been showing increasing interest [link]. Names like VideoEgg, YuMe, Blinkx AdHoc, ScanScout, even YouTube, are entering the fray of experimenting and developing the video advertising market.
It's exciting because nobody really knows which direction things are going.

I split the interpretations into the following 4 groups:
1) the "short pre-roll ads are effective and overlays are annoying" group
2) the "we think text/flash overlay ads are the future and will offer a thousand different variations on it" group
3) the "we not only believe in overlay, but Picture-In-Picture video overlays!" group
4) the "we're a bit old school and we think video advertising is just like TV advertising" group

Beyond the format race, there's also the relevance race. The two are inextricably tied, as the relevance of a video is only as good as its meta data. Some solutions are using speech recognition engines to analyze videos and others are even attempting image recognition. How do you think either recognition engine would categorize the "Daily Milk Gorilla drummer" Ad?

This is going to be a very interesting year.