i-News: January 7, 2008

Also in this issue:

* MEDIAWEEK 2008 Forecast for Newspapers

* The Art & Science of Data Optimization

“Imagine an advertising world in which spending on interactive, one-to-one advertising formats surpasses traditional one-to-many advertising vehicles, and a significant share of ad space is sold through auctions and exchanges. Advertisers know who viewed and acted on an ad, and pay based on real impact rather than estimated ‘impressions.’ Consumers self-select which ads they watch and share preferred ads with peers. User-generated advertising is as prevalent (and appealing) as agency-created spots.”

Saul Berman & Bill Battino, IBM Global Business Services

The End of Advertising as We Know It

A comprehensive survey of more than 2,400 consumers and 80 advertising experts by IBM has led the company to identify four change drivers that are shifting the advertising paradigm. In turn, those change drivers are serving as harbingers of four evolving future ad industry scenarios. Those drivers include:

Attention: “Consumers are increasingly in control of how they view, interact with and filter advertising in a multichannel world, as they continue to shift their attention away from linear TV and adopt ad-skipping, sharing and rating tools.” Key findings: 71% of respondents spend more than two hours each day on the Internet compared to 48% spending equivalent time watching TV.

Creativity: “Thanks to technology, the rising popularity of user-generated and peer-delivered content and new ad-revenue-sharing models, amateurs and semi-professionals are now creating lower-cost ad content.” The forecast: this trend will continue. User-generated content sites are the most popular for viewing online video content, attracting 39% of respondents.

Measurements: “Advertisers are demanding more individual-specific and involvement-based measurements, putting pressure on the traditional mass-market model.” The forecast: 20% of ad revenue will shift from impression-based to impact-based formats within three years.

Advertising inventories: “New entrants are making once-proprietary ad space available through open, efficient exchanges.” The forecast: More than 50% of ad professionals anticipate that open platforms will take 30% of the revenue currently going to traditional media within the next five years.

Authors of the IBM study, Saul Berman and Bill Battino, have outlined four potential scenarios based on their research. It is likely, they say, that these scenarios will co-exist for the foreseeable future.

Continued evolution: “In this scenario, the one-to-many model still dominates, but the industry evolves in response to DVR penetration, the popularity of user-generated content and new measurement capabilities (albeit for ‘old’ formats). Advertisers, therefore, allocate a greater portion of dollars traditionally spent on direct marketing to channels typically used for brand-oriented advertising.”

Open exchange: “Here, the industry morphs behind the scenes, with little to no additional consumer influence. Advertising formats largely remain the same, but ad inventory is bought and sold through efficient exchanges, bypassing traditional intermediaries.”

Consumer choice: “Tired of intrusions, consumers exert more control over the ads they view and filter. Formats evolve to contextual, interactive, permission-based and targ3eted messaging to retain attention.”

Ad marketplace: “Consumers choose preferred ad types as part of self-programming their media choices and are more involved in ad development and distribution. Ads are sold primarily through open, dynamic exchanges, allowing virtually any advertiser to reach any consumer. With new consumer monitoring technologies in place, consumer action drives bids on inventory up or down.”

Berman and Battino imply that media companies must be innovative in their business designs if they are to prosper in the evolving future, particularly as those designs relate to how advertising is sold, revenue models and reporting metrics.

“The next five 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.”

MEDIAWEEK 2008 Forecast for Newspapers Less than Enthusiastic

The release of MEDIAWEEK’s forecast for 2008 offers little optimism for the newspaper industry. The bright spots – such as The New York Times’ national ad picture – are few and far between. Instead, softening retail and classified advertising has most publishers cautious regarding the state of their business. Even online ad revenue growth in excess of 20% is not enough to offset the decline in print spending.

Although most publishers forecast declines in print revenue this year, there is optimism in the new opportunities afforded by new and existing online ventures as well as ancillary products such as niche publications.

The Art & Science of Data Optimization in Content Creation

According to Craig Dempster, VP/Content Solutions at Merkle Inc., optimizing the use of data and analytics within an organization is a three-step process comprising both art and science when it comes to creating marketing content.

The “art” is having a sense of what information is available that will impact marketing performance. The “science” involves the quantitative processes that help to create the ideal mix of data content.

Step One: Source Optimization. “In this step, sources are analyzed and indexed based on their ability to improve the models or mix of data that are driving DM campaigns. After this is done, marketers will determine which sources are likely to provide the highest lift and can limit their focus to ‘impact’ data.”

Step Two: Audience Optimization. “This process takes sources that survived optimization and augments the individual consumers or businesses with deeper data. This greater knowledge enables analytics that will determine the optimal prospect universe.”

Step Three: Campaign Level Optimization. “This process determines the prospects that will be selected for an individual campaign. Campaign-level analytics are improved because data optimization has insured that the most impactful marketing content is being analyzed and used.”

In summarizing, Dempster emphasizes that this is an ongoing process. “Too many times marketers wait until their campaign performance begins to degrade before reviewing the mix of data content used in their latest campaign or program. Instead, a best practice is to focus on performance improvement by executing data optimization each time new campaign history data becomes available.”

MAAX Users Group Set for Las Vegas January 28-30

The agenda for MUG 2008 is coming together nicely. Among the planned presentations are the following:

* Analyzing the changing dynamics within the print and online customer base and the implications for strategic planning

* Now that you've got MAAX, how do you get your return ASAP?

* Using MAAX to evaluate niche publishing opportunities

* Optimizing TMC production with MAAX

* Telephone-centric segmentation

* The role of MAAX in managing the campaign lifecycle and continuous improvement

* Circulation forecasting models in MAAX

* E-marketing and MAAX

* ASTECH development initiatives and priorities

As always, MUG is FREE to members of the MAAX Community. For more information, contact Tom Ratkovich at ter@astech-intermedia.com.

ASTECH News & Events

* 2008 MAAX Users Group Meeting. Put it on the calendar now – January 28-30 at the Westin Casuarina in Las Vegas.

* INMA Summit on Audience Development, Jan 31-Feb 1, Palm Springs. ASTECH will be exhibiting at this event.

* NAA Marketing Conference, February 24-27, Orlando. ASTECH will be exhibiting at this event.

i-News is brought to you by ASTECH InterMedia, the leading provider of data-driven, revenue-focused marketing automation solutions for the newsmedia. For more, please go to www.astech-intermedia.com