Guest comment: 2010 - Online Advertising comes home

Online ad spending has proved more resilient in this recession than other media and is set to post important gains in 2009; a reported 2.2 per cent growth is expected for the European industry this year, followed by a 6.5 per cent growth in 2010.

Growth is a result of a share shift from traditional media to online media. It is particularly true in the UK, where online advertising spend grew 4.6% to £1.75bn in the first half of this year, giving it a record 23.5% market share—overtaking TV to become the UK’s biggest advertising medium.

However, despite projected improvements in the economic climate and general outlook for online advertising, there will continue to be a drive for greater efficiencies and higher rates of return. Localisation or geolocation targeting of content has been identified as one of the key enablers to higher returns. Bricks and mortar retailers have long been able to provide this service, now digital advertisers have the technology to do the same.

Targeting ads by country, region—or even city—means a reduction in wasted impressions and increased click-through rates: a double bonus of reduced costs and increased revenue.

When it comes to online advertising, the one-size-fits-all mentality simply does not work. Advertisers need to cut through the vast clutter of the Internet to increase the reach, relevance and response of their messages—but do so while respecting the privacy of online users. IP intelligence, with its strong geolocation capabilities, provides information needed to deliver truly targeted ads and content in a simple, cost-effective and privacy-sensitive manner.

IP intelligence involves information about an online user such as geographic location (country, region, city and postal code); connection speed; Internet Service Provider (ISP); domain name; demographics; company name; proxies; language; time zone; and longitude/latitude.

With comprehensive information about online users, advertisers can realise the following benefits: 

Increase click-through rates - By delivering relevant ads to an online audience, companies increase their click-through rates (while increasing ROI of online ads.) For example, a company, which sells sport’s team merchandise, can localise their ad content so that visitors from the Greater Manchester area are presented with ads for Manchester United gear, not a competing club’s, while surfing the Internet.

Target ads based on geography - Knowing the geographic region of web visitors enables companies to provide relevant homepage ads, increasing the likelihood of a purchase. Wouldn’t it make more sense to show them relevant products that minimises their search time and helps them make a quicker decision? For example, the promotion of relevant weather–based products based on local climatic conditions.

Enhance couponing - A retailer with only a few shops on the south coast   wants to try its hand at online advertising. The ad campaign provides a coupon to visitors, giving them a percentage off an item from the stops (if they print it out and bring it in.) Using IP intelligence, the retailer can save money, increase the value of the media campaign, and boost response rates by limiting the coupon offer to those living in the surrounding areas. This form of online advertising also increases offline promotions by driving traffic into retail locations.

Reduce random clicks – Geo-targeted ads save companies money by reducing ad clicks from non-valued audiences. Since geo-targeted ads are only presented to applicable web visitors—for a particular promotion—companies reduce the number of wasted impressions, by not presenting ads to those visitors who aren’t a fit for the promotion. Targeting an audience with the right message reduces waste and delivers more measurable results.

Serve media-rich online ads - The hot ad medium right now is streaming video. IP intelligence allows companies to customise delivery of an ad based on the connection speed of the end user. Advertisers can now serve media-rich ads only to those users with high-speed connections.

By utilizing IP intelligence, advertisers now have a way to reach out to an untapped and previously hard-to-reach online audience—the unregistered user—and begin to build a solid relationship by offering products, services or useful information that appeal to the user where it matters most—close to home. In turn, online advertisers can confidently look to 2010 with a keen eye on reducing costs and increasing revenues.

By Frank Bobo

Vice President

Digital Element

www.digital-element.net