Scott Meyer talks about changes and trends in the online marketplace, including intelligent Facebook integration strategies and user-generated content. He discusses About.com's position to take advantage of trends in online advertising.
Transcript: Scott Meyer on Trends in Online Advertising
It is going to be a very, very interesting next six months. I'd say the biggest opportunities for publishers right now one is just bigger budgets, a lot bigger budgets, but more importantly I think a maturity of the online ad business, with dollars starting to flow into upfronts more than just the spot market. You are starting to see big advertisers – and About.com is one of the publishers that is being invited to participate in these – big advertisers wanting to lock down premium inventory in advance for the whole year. They want to spend probably more money with a smaller set of highly sophisticated partners and then leave dollars that in the past were spread out amongst a larger number of sites to in fact smaller numbers that those sights will be fighting for. So it's part of this overall ad market consolidation where you are seeing the top portals, the leading vertical sights like About, and the ad networks, continuing to increase their share and then the smaller sights, seeing most of their growth being driven by their participation in those ad networks, like a Ad.com or Google AdSense.
Yeah, I think online the growth rate is still quite outstanding and I think there is a new wave that is coming, and in some ways what may happen as the economy cools off a little bit in the US and it may give incentive to marketers to take an overall look at their spending and look for effectiveness, but I think that these prognostications of a wholesale abandonment of forms of advertising, whether it is print or television or radio, that have been around for a very long time I think are a bit overblown. What you'll see is continued pushes for accountability. That's the beauty of the internet, it is completely accountable, and I think now you are seeing that the range of experimentation that is going to happen online is accelerating, and it's accelerating not just in terms of the traditional IAB units which are still relatively new but have been around for the last six or sever years, but into more forms of user generated content, more tests of custom integrations with advertisers, that's something we re doing a lot at About, and expanding into mobile, which is also something at About that we're going to be doing in the next couple of months.
It's actually been good for us, because I think that what is happening now is that the players who are partners – we work a lot for our unsold inventory – whether it's a Tacoda or a Revenue Science, or an Advertising.com --- they are coming to us with more sophisticated campaigns and thus higher rates for us as a publisher. And the more sophisticated those folks get, the better for us and the better for our advertisers. The other thing that is happening I think is that it is separating who the top performers are going to be in these key verticals. So About while we are a very large site, overall, depending on the month, we are consistently between number 11 and number 15 on the web in terms of reach in the US, our real strength isn't in that overall reach, it's in our reach in key verticals. So we're the second largest health site on the web, we're number two in parenting, we're in the top five in home and garden, travel and technology. So what it allows us to do is to fulfill those specific vertical needs that an advertiser has, but then also deliver them this large scale across our 37 million unique users in the U.S. So putting those together, that's great for us because, there really aren't going to be that many sites outside the top portals, the leading vertical sites, and then the ad networks, that can deliver those types of solutions that marketers are looking for.
There is so much innovation right now. That's one of the most exciting things about our industry right now, obviously, it's innovation central. The coolest stuff I have seen recently I would say is the intelligent integration of Facebook applications. I think that's the beginning. It's unclear how that scales, and I think I myself am somewhat skeptical that all of this commotion will actually scale into sustainable businesses. But there is definitely something there. I think the next big exciting innovation is marketers engaging in conversation with their users more, and understanding how to manage it well, both on their own sites, as well as engaging creatively in the conversation on other sites, whether it s on a site like About, or Facebook or Myspace, or some other site. And I think the final thing that is pretty interesting on the advertising side is that despite all the commotion around cross-platform selling, you're starting to see both in print and I think particularly in television, the big networks and the big newspaper companies and magazine companies figuring out how to use their websites more effectively than they have probably ever used them before. It's easy to count out these big companies that are mostly here in New York as not getting it, it is also way, way too early to count out these traditional media companies that they'll never get it on the web in a way that can lead them to be not just benefiting from the growth in online advertising because all of them are, but to the point where it can actually help them drive their overall business performance.
User generated content is a very powerful tool, it is also very dangerous in the wrong hands, and that requires advertisers who understand it well and agencies who understand it well. It enables them to take full advantage of it, but it also means that if you are not sure, you're going to need to be very careful in working with the right publishing partners, the right ad agencies, to reach your goals. There are numerous examples of people who have been swayed by the "wow, cool" factor. They see the fear when their boss comes to them or someone else and says "Hey did you see what your competitor s doing with X?" And they freak out and say give me one of those as well. That's the dangerous piece. Now the flipside is taking users and eliciting from them what they really love about brands, and the best brands out there, the people, the consumers always have done the marketing for them, and what user generating content allows you to do is amplify that and accelerate it in a way that you never could before. Now, conversely, if you don't know how to use it well, it allows a message to get out of control and work against you in probably more dangerous ways than it has before, which is back to the reason why you really need to know who your partners are, in terms of publishers you are working with and with the agencies you are relying on to help you put this stuff together.
