Article by Paul Fisher. First published in Marketing Mag, March, 2010

I'm resisting my inner fortune teller as I put pen to paper and instead I want to update you on some key trends in the online advertising world internationally. Some of you may have already come across these trends which therefore place you ahead of curve – but they sure emerge as key themes in 2010.

Firstly off is what an industry colleague of mine is calling "media-meshing". Most recently it was known as integration or convergence but it's become much more. There's no doubt that marketers and agencies are tiring of the industry's silo approach to planning and buying media, so they are seeking out publishers who can offer meshed media solutions or can at least demonstrate how their solution meshes with other media to deliver more effective and efficient media solutions to advertisers. That media meshing doesn't have to be prescriptive – it can involve social media with search; performance or response display advertising with brand display advertising; display with search; or online video with TV.

The early adopters of online advertising who started by placing their TVCs online are now better educated and more sophisticated about online. The are using online to gain incremental, unduplicated reach to their expensive TV ad campaigns, and they are impressed by the interactivity with online video advertising and the many benefits it offers. This media meshing is leading to increased site visitation, increased search activity, incremental brand metrics, viral social media commentary and 'brand buzz'; and increasingly unit sales and market share.

So for smart marketers, that means no more conversations or quick cheap sales pitches advocating one medium, one execution and one tool. Serious marketers and agencies understand the strengths of each media format and mesh them together in a well crafted strategy and implementation. They are using sophisticated and intelligent measurement, all the while providing a multi-channel framework for the communication with real people through the use of brilliant, entertaining and engaging creative that is shaped by the communities it touches along its journey.

Secondly, the application of various targeting methodologies to enhance consumer's experience with advertising. In June 2008 eMarketer in the US reported that 7.2% of the $US 23 billion spent in online advertising was spent on behaviorally targeted advertising. This is predicted to have risen to 11.4% in 2009 and 23.4% by 2012. That's an estimated $US 9 billion on behavioural advertising alone!

In a recently published internet marketing handbook by the IAB UK "A guide to Online behavioural advertising", Alex Tait, digital sales and marketing manager for the UK Post Office declared "We use behavioural targeting within our display campaigns to improve buying efficiencies and to maximise our conversion rates, ensuring relevant messaging and creative are served to the right profile of prospects and customers at the right time."

He talks about using retargeting to reach consumers who have enquired about or bought travel insurance with advertising for foreign currency for example.

Regarding results and ROI, he writes "The results are impressive and complement our overall media strategy for the product. Through continual optimisation of the campaign to deliver maximum ROI we can run the activity all year round."

With favourable results for consumers, brands and publishers/networks, online behavioural advertising – or OBA – is a rare win-win-win.

One of the questions I am asked most often is "what percentage of total advertising budget should advertisers/brands allocate to digital media?" The objective answer is that of course it will vary wildly depending on so many variables such as objectives, target audience, other media used, specific digital media tools being used eg search, rich media, video and so on.

If you want a ball park answer to use however, I would say 30%. Why 30? Well the industry average is currently 15% (it's also 15% across 15 European countries, and 12.5% in the US), and growing at about 2 points each year here in Australia.

This is of course a 'blended average' - that is if the industry average is 15 cents in every ad dollar is being spent in online, then some companies must be spending 30 cents because many are still spending zero. Therefore, it pays to be a brand spending 30% than zero if you want to reach and engage consumers online who are currently being influenced by your competitor's 30% of their budget allocated to online advertising.

Online advertising is trending up across the US and major European economies, at the expense of other media, most notably free TV and newspapers. In late 2009, the UK online advertising industry exceeded all other media, the first major economy in the World to do so. (Denmark has also achieved this feat, obviously not considered by the UK media a 'major' economy!).

The increased usage by consumers of the internet, the spectacular growth in social media consumption, search and online video, coupled with greater understanding by marketers and agencies how best to utilize digital media, all fuel this growth and will continue to do so for years to come.

The high publicity given interactive campaigns such as Queensland Tourism's Best Job in the World and even Kraft's Vegemite isnack 2.0 furore are making marketers talk about how they should be engaging with their consumers in using interactive media.

Here in Australia, the IAB forecasts online advertising will exceed $3 billion and all other media by 2014.

Online, interactive advertising in 2010 – it's meshed with other interactive media, it's highly targeted, and it's growing spectacularly.

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