Net Net We Need More Ad Space

It seems clients are in love with internet advertising to the point of saturation of the medium. McKinsey Quarterly in collusion with ACNielsen project through research that there is not enough space out there for the intentions of many advertisers. They have broken down the medium into banner ads, paid search and inclusion, and the newer online video. Banner ads, with a capacity of 4.0 -8.0 Billion, currently pulled in 2.0 Billion in 2005 with an expected increase to 2.5 billion in 2007. That means they take up 25% to 50% of the capacity. Paid search, with a capacity of 5.0 to 7.0 Billion, rang up 4.7 Billion in 2005 and marketers have the intention of doing 9.0 to 12.0 Billion. And online video, doing only .3 billion in 2005 with a capacity of .4 to .6, has marketers thirsting after the very dynamic and user demanded video with a projection of 1.4 to 3.2 Billion.

While there is sufficient banner space to handle the current advertising demand, there is not enough capacity to handle the demand for paid search and online video. This is the wild west. People are spending the dollars without any central measurement tools to judge how effective they are. With limited inventory, Adam Smith told us prices will only rise. This means it's even more expensive to be in game even if it's a losing proposition.

No one is doing this stuff for fun. Clients as well as agencies realize that the consumers are spending more time here and we need to be with the "eyeballs". Today it's important for agencies to be able to manage both traditional campaigns as well as online campaigns. That's the only way we will continue to be stewards for our client's brands and manage the total marketing mix. One day there will be plenty of supply and an accurate and widely accepted media metric to measure delivery. Until then we will have to innovate and compete in a world where prices change quickly and performance is across the board.