Smaller sites scored in 2007 as pricier portals snubbed

The media arm of Microsoft-owned Avenue A/Razorfish purchased $735 1000000 of online media from 1,800 sites in 2007. Charge were up 36 percentage while the figure of directly buying human relationship more than doubled.

Jeff Lanctot, SVP of global media at Avenue A/Razorfish, said the determination to buy more ads from a larger number of publishers was partially driven by portal attempts to addition prices. Their bid failed: Portal terms grew only 7 percentage in 2007, compared with 30 percentage growth at vertical sites. For that ground, he said he doesn't fear ongoing consolidation in online advertising will consequence in CPM hikes, an result some agencies have warned about should Microsoft succeed in its bid to buy Yahoo.

"The atomization of ad spend flies in the face of the impression that there's more power in the hands of a few participant," said Lanctot. "Last year the portals tried to addition CPMs. There was no tolerance for those addition, so we looked elsewhere."

The disbursement trends were published in the agency's 2008 Digital mentality report. The annual publication discusses developments in online advertising, in specific on the media planning side.

In add-on to noting the shift in disbursement away from portals to hunt and vertical sites, Avenue A/Razorfish said the year had seen increased spending on amusement properties, including video, gambling and sociable networking sites. Hunt spending commanded 31 percent of charge in 2007, up from 28 percentage the year earlier. Vertical site disbursement meanwhile grew from a 37 percentage share of spend in 2006 to a 39 percentage share last year.

in addition, the federal agency consolidated its ad web spending. Charge were up 34 percentage, with about all of the new money going to to the top five ad networks. Spending on all other ad networks was flat.

"The window's closing on the second tier," Lanctot said. "It'll be increasingly tough to break into the top tier."

Average CPMs for the year were up 20 percent over 2006. The price increases favored smaller sites, which increased their cost per thousand by 30 percent on average compared with 7 percent at the portals, according to the report.

In past years, the report has focused largely on advances made and challenges faced by the major portals. This year it takes a slightly different format, focusing instead on providing strategic guidance and discussing a few well-performing properties. Part of the motivation for the shift may be a wish to avoid critiquing its new parent or being accused of bias.

Asked broadly about the effectiveness of display advertising, Lanctot said better targeting and creative are needed to guarantee the future health of in-page graphical formats. He also said Web site layouts should be changed more often than they generally are, to ensure visitors don't become blind to ad positions on their favorite sites.

"If none of those things make the progress they should, banner advertising will continue to wane in importance," he said.

The branding effectiveness of online advertising has declined over the past two years by nearly every measure, according to data recently provided to ClickZ by Dynamic Logic. Consumers exposed to online ad campaigns between Q4 2004 and Q3 2005 exhibited "brand message association" that was 4.3 percent higher on average than a control group, according to the marketing research company. However, by 2006 that message association lift had fallen to 3.5 percent, and by last year it was down to 2.5 percent.

Avenue A/Razorfish also devoted some space to discussing the role of philanthropy and social causes in digital media and marketing. During its May 2007 Publisher Summit in New Orleans, the agency auctioned off items from major brands to sites including About.com, AOL, MSN. The publishers' bids took the form of donated online ad space that was later populated with creative for the Children's Health Fund.

Other cause-based digital awareness efforts mentioned in the report include Google's use of its Google Earth browser to spotlight mining-related environmental damage in the Appalachian region, and a Microsoft campaign that donated money to cause organizations when people used its IM client.