How Can I Best Use This (Ad) Space?

Google’s first foray into the business of providing video content via AdSense will feature the work of Seth MacFarlane of “Family Guy” fame. The first video is pretty straightforward. The short cartoon has a pretty easy joke, making fun of a classic video game.

Super Mario has finally defeated the big boss and rescued the princess and wants the simple reward of a kiss. Unfortunately, the princess has a different perspective and isn’t into it. Mario insists that he deserves the kiss, recounting his adventures of jumping on mushrooms and capturing gold coins, but no luck. The cartoon ends with Mario giving the princess back to the monster for her comically disgusting devouring. These videos are all sponsored by Burger King.

Google isn’t the only one slowly moving into the content distribution business. Amazon announced it will offer a content delivery network, built within its Web services. While not the same sort of system as Google’s, it represents a platform on which content could be placed in one location and distributed far and wide, with providers paying only as they go.

Akamai built its business on this model, way back when home broadband seemed about as likely as robot housecleaners. Now, we have $20 a month broadband and the Roomba.

Advertising and the Network Shift

The networks are slowly shifting. In its 2008 Internet Advertising Model, JupiterResearch estimates that advertisers will spend $3 billion in 2008 on static-image ads. We can assume that this also includes simple GIF animations, but that’s a lot of space being purchased and filled with just an offer or a graphic. A growing percentage of the static-image ad market are tiles, those ultra-small, simple images that line the sides of pages throughout the Internet.

In 2009, however, rich media ads will overtake static, according to JupiterResearch. Next year, we’ll spend those $3 billion on ads with animations and interactivity. According to the model, next year is the transition moment where more money will be spent on rich media and less is spent on static images.

What will this mean, though, for both the advertiser and the consumer experience? More money going to rich media doesn’t necessarily mean more ads. Rich media ads cost more money to produce and distribute than static ads, so it isn’t like 10 static ads will be replaced by 10 rich ones. It’s more like 10 static ads will be replaced by two rich ones.

But the problem may be that the total number of static ads will actually increase. A lack of interest may spur a fire sale on the inventory, which will be snatched up either by second- or third-tier advertisers or top-tier advertisers looking to boost reach and frequency.

Bottom line: expect more ads on the Internet, and more difficulty breaking through and being noticed — unless you change the nature of what you’re doing.

Content, Not Ads

The best online ads have always been close cousins to content. The HP Pong banner was the first interactive ad, and it showed the way to a new way of thinking. The idea was that you purchase space on a site and place a message there. But what if you thought more about the experience the consumer is seeking on that site and try to add to it in a way that makes the experience more valuable and leads back to your brand?

Google’s move and the rumblings from those other players are inviting us to again think this way. The AdSense network is, at its heart, a collection of sites that have agreed to allow Google to place something on their pages. The agreement is that the publisher brings the people and provides some space and data. The publisher trusts that Google (or really, anyone who is running the network, be it Tacoda, ValueClick, or any of the other networks) will put something there that will generate some value.

Who says the content has to be an ad in the traditional sense? Perhaps it can be a cartoon. Maybe it can be a game. Maybe it’s a currency converter or a list of interesting blog posts. Maybe it’s a design-your-own-T-shirt engine, using the page’s graphics.

Whatever it may be, clearly the way for online advertising to evolve is simple: stop trafficking banners. When you buy space on a site, the question shouldn’t be, “What is the best ad I can put here?” The question should be, “How can I best use this space?”

Because, really, you have a lot of options.

Join us for a new Webcast, High-Touch Personalization, The Successful Marketer’s Secret Ingredient, September 29 at 2 p.m. EDT.

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