Ad:Tech NYC Overview

Allen Stern has asked me to cover Ad:Tech 2007 for him, I had already planned on attending the exhibit hall portion of Ad:Tech because every advisor for my new venture, Nearness Function, which is an ad network for the publishers of dynamic content, had told me that Ad:tech NYC is the place to be and perhaps the most valuable conference for me to attend this fall.

I attended, briefly, Ad:Tech San Francisco earlier this year. By briefly I mean I managed to get to the exhibit hall a few hours before it closed on the very last day of the exhibition time, thus I raced through the show floor talking to a few select vendors but mostly soaking in who was there, what messages they were emphasizing, and getting a sense of the show and the current tech of the advertising industry. In San Francisco the vibe and emphasis was mostly on web advertising, primarily pay-per-click networks, and very much emphasizing raw volume and mass numbers (a billion impressions here, a billion impressions there).

In NYC I expect to hear about a wider perspective on the ad industry and the transition of even more advertising dollars to the web (and beyond the web to mobile and multiple-platform plays).

At the San Francisco show I mostly talked with exhibitors about a mobile web application, NELA (for "Never Eat Lunch Alone") which my partner and I developed. I also gathered information and knowledge for the ad network which we planned on building but at the time had not started focusing on. This week when I am not reporting on sessions, exhibits and hallway discussions for CenterNetworks, I will be talking with advertisers, media buyers, software publishers and others about Nearness Function.

So full disclosure, I have a stake in and strong opinions about the ad industry and the future direction of the industry. I will try to capture what takes place at the show, but I will also share my opinions and commentary. Here though a baseline of my perspective on where the ad industry is going - both on the web as it works today and into the future.

1. Brand advertising and marketing will dramatically increase on and via the web. Brands will move online as their demographic targets continue to spend more and more of their attention online. This includes, perhaps, substituting media-via-the-web for media from radio and TV. It also includes an ever growing range of entertainment and social options. In many cases this entertainment may originate via the Internet but may be "consumed" even while offline and increasingly via non-computer devices. For example much of my personal music and talk listening is no longer via radio but via downloaded podcasts. Most of the video I view - both short and long form also comes into my home via the Internet (purchased from iTunes, downloaded from other sites, viewed in site, etc). Increasing some of these entertainment options will be affiliated with brands.
2. Brand advertising had very different requirements and timeframes than most of the types of advertising currently shown on the web. Branding is about the associations and recognition of the brand within a target audience at some future point when they start a buying process. In many cases brands need to be established a long time ahead of purchases. In many cases, brand choices are long lasting and deeply important decisions in an individual's life. For example, the make and model of a car which will likely be part of a given owner's identity for many years (my parents being one extreme, they have had their current cars for over a decade, and have been driving the same brand for closer to two decades). Brand advertisements have to serve many different purposes - they have to establish a brand identity, they have to remind people about the brand as an option, and over time they have to help differentiate the brand in often crowded markets. The purchase cycle in a given industry will dictate, to a degree, the speed at which a brand identity might need to change - but many of the most valuable and useful to their owners brands have had relatively consistent branding for a very long time (Coke, Mercedes-Benz, etc). In the new, hyper global, always-on, Internet powered age, brands still have a great deal of power, impact and value - but also much adapt to a new media landscape, to new patterns of purchasing and use, and to new ways of communicating and interacting. Brands can see their value destroyed almost overnight if they are not careful online (Kryptonite locks for example) but likewise, the Internet can assist new brands in establishing themselves. (new brands of LCD screens, Scion cars, the US launch of the Mini, Lenovo, etc)
3. The current ad unit models of the web (mostly CPM - cost per impression, CPC - cost per click, and CPA - cost per action i.e. "lead generation") are not sufficient going forward. New models and along with them new metrics will start to show up and be experimented with. My personal bet is on a model that builds on other media models - a fee based on active attention over a period of time (i.e. your brand in front of X people, each for up to 30 minutes while they are actively using a given application etc)
4. Search advertising is not going away and will continue to have lots of innovation alongside of other experiments in the advertising space. Search is a great way to reach people in a specific frame of mind - but it does not meet the full range of commercial message needs.
5. While today the US is the dominant market for online advertising this will not always be the case. Already many online applications see well over 50% and in many cases as much as 3/4ths of their user base being outside of the US. Both global brands and local advertisers will increasingly see a great value and return in reaching this international audience. As a result the importance of working with a global, multilingual set of ads and advertisers will only increase over time.
6. While standards are very useful, especially when selling ads in bulk, there will also be a push and pull in the industry as ways to package and sell non-standard ads and advertising opportunities will grow in importance, especially as in many cases they may be highly effective ways to distribute and spread a given message.
7. Full disclosure cannot be over emphasized. However unfortunately many advertisers, ad networks, and publishers will continue to experiment with ways of distributing commercial messages without clear and full disclosure of what is paid for commercial messaging. "Pay-per-post" is perhaps the poster boy for this problem, but there will be countless others who try variations. The current movement to mass product placement (usually without much if any disclosure) on American TV shows will, inevitably make its way onto the web. My personal hope is that on the web great disclosure can and will be delivered to the actual viewers - and as a result they can make an even more informed decision about the impact they give to a given placement. However I may be fighting this battle for years and years to come. [while we do plan on exploring ways to help companies place non-standard commercial messages, we will only do so when there are clear and deeply embedded into the medium disclosures]
8. Targeting of advertising will be a rich source of innovation for the next few years. However this needs to be tempered when it comes to brand advertising vs. immediate action ad units. If advertisers and networks are not careful, certain types of targeting may bite back. My personal prediction is that some aspects of targeting based on social network data and many forms of targeting by tracking large portions of online behavior (ISP's monitoring clickstreams for example) may face some degree of consumer backlash as well as lead to some serious issues at some point in time. Anything from targeting which hits a bit too close to home to subpoenas being issued to an ad network for the clickstream of a given targeted individual. Perhaps in the US this might only have a civil impact - but already Yahoo! and Google have encountered deep issues around requests by governments such as China for information about users of their web services online activities - my prediction is that various ad networks which are tracking users and targeting their behavior over time may someday face related isues and requests.

Ad:Tech NYC should be a very exciting conference.

On Tuesday evening I will be, unless the conference has too many evening activities planned, organizing a dinner gathering for Korean Food in Koreantown. All readers of CenterNetworks are welcome to join me for dinner.

And if you are attending Ad:Tech NYC please feel free to stop me if you see me at the conference and introduce yourself. I hope to "never eat lunch alone" all throughout the conference - and that goes for breakfasts and coffee breaks as well. After Ad:Tech I will be in the NYC area until Tuesday Nov 13th and would welcome the opportunity to meet up with any readers then as well.

See you at the show!

Shannon Clark is a founding partner at Nearness Function, a new ad network for the publishers of dynamic content which will launch in a few months. He is the organizer of MeshForum - an annual conference on the study of networks and the one day MeshWalk series of walking conferences. He has been blogging for many years at Searching for the Moon where he covers technology, economics, food, and the life of an entrepreneur. His first server on the Internet was in 1991, he started his first company in 2000 after many years working as a technology consultant.