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Ad Exchanges To Take 30 Percent Of Current Ad Spend By 2011: Report

Over the next five years, online ad exchanges, like the ones run by Google, (NSDQ: GOOG) Yahoo (NSDQ: YHOO) and AOL, (NYSE: TWX) are expected to take about 30 percent of the share currently spent on traditional media, according to a global survey of more than 2,400 consumers and 80 ad executives by IBM Global Business Services. The report, based on a mix of online, telephone and in-person polling data, “The End of Advertising as We Know It,” offers the standard advice, which has already been taken to a large extent at major media companies, that they must cast off their mass audience mind-set to focus more on niches. Secondly, distributors need to deliver targeted, interactive ads geared toward a range of different platforms. As for the concrete findings, IBM’s survey showed:

The next three-to-five years: Nearly half of the ad industry respondents expect a revenue shift of at least 10 percent away from the 30-second TV spot within the next five years. Another 10 percent thought there would be a dramatic (greater than 25 percent) shift. And two-thirds of this group of ad professionals expect 20 percent of current ad spend to move from impression-based to impact-based formats within three years.

Online video: User-generated content sites were the top venues for watching online video, attracting 39 percent of respondents. And traditional doesn’t translate online: 40 percent of respondents felt ads that appeared during an online video segment are “more annoying than any other format.”

Growth categories: Mobile ads will have the greatest compound annual growth rate, gaining 41 percent between 2006 and 2010. Global internet ad spend will have a CAGR of 20 percent, equal to product placement. Those two are followed by interactive TV promotions and in-game ads, with each expected to grow 19 percent over that period. Release. The full report is available here (pdf).

One Response to “Ad Exchanges To Take 30 Percent Of Current Ad Spend By 2011: Report”

  1. If you had some stats on certain smaller local media groups I think it might be worse. Anything that depends on local consumers might even be hit harder as local ad people shift to local search results.