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).
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