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3 Hidden Trends in 2008

By Geoff Ramsey—CEO, Co-Founder

Business statistics can often reveal a great deal of information about a market or trend. A single number, like a picture, can be worth a thousand words. Take 9.3%. That figure represents eMarketer’s prediction for the share of total US media spending going to the Internet this year (in 2007, the share was only 7.4%).

In absolute terms, 9.3% translates into $27.5 billion being spent on various forms of Internet advertising in 2008, according to eMarketer projections. That number, in turn, reflects a variety of trends and industry developments that are expected to take place. For example, advertising on social networks and online video are both projected to grow at double-digit rates this year.

But while video and social networks are among the hottest new ad formats today, they will account for only $2.9 billion, or about 10% of total online advertising dollars projected for 2008.

I believe that these trends, while important, are superseded by three deeper, more fundamental transformations taking place in the media world. These transformations aren’t so easily captured by numbers.

The first of these transformations starts with media fragmentation, which, because of the Long Tail effects of the Internet, is expanding exponentially. However, we are now learning how to harness media fragmentation to serve the needs of advertisers, publishers and, yes, even consumers.

Over the past year, we have seen significant consolidation and simultaneous expansion among the online ad networks. Ultimately, as these ad networks continue to grow and become more sophisticated in their ability to target specific consumer groups, they will allow advertisers to reach large audiences that are stitched together from hundreds or thousands of diverse Web sites. Eventually, advertisers will be able to have their cake and eat it, too: They will enjoy precise targeting of ads without sacrificing reach.

As Adam Gerber of Quantcast has said, in the future, online media buying will be about "the re-aggregation of a fragmented audience that's actually watching different things."

Read more - eMarketer.

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