Web advertising growth will be increasingly dependent on the successful introduction of real targeting, according to research from Jupiter Communications presented at its third annual Jupiter Online Advertising Forum in New York.
The research stated that the promise of highly targeted advertising is currently not being met, and failure to do so could severely hinder future growth rate of the medium.
Jupiter said that the relatively high price of online ads compared with the price of ads in traditional media is theoretically justified by targetability and interactivity. Without real targeting, however, the potential of interactivity goes largely unrealized, as demonstrated by flattening clickthrough rates, which now hover around one percent.
“The Web has long held this promise of being the ultimate one-to-one marketing vehicle, but currently sites are often unable to provide advertisers basic demographic data–age, sex, income–which is standard supporting evidence for charging higher CPMs in traditional media,” said Evan Neufeld, practice manager of Online Advertising Strategies at Jupiter. “The current crop of deals between ad targeting technology vendors (numerous such stories were reported by IAR earlier this week), and major Web sites and other tech players should serve to accelerate the development of targeting, but the time to move was yesterday.”
Still, the report advises major marketers to start spending aggressively now, rather than risk losing market share and branding opportunity.