The IAB Annual Members Meeting in New York on November 29 was jam-packed with exciting developments and upbeat forecasts. Not only did the industry record its first ever $4-billion quarter (story here), but ad revenues for the first three quarters of 2006 are nearly equal to the total for all of 2005. When the counting’s done, 2006 online ad revenues will exceed $16-billion, nearly triple the tally at the bottom of the dot-com bust in 2002.

Speakers offered many reasons for our good fortune, but they also worried about our ability as an industry to support continuing rapid growth with outdated systems and processes and without measurement standards.

On the upside, nearly every major advertiser will increase commitment to online advertising again next year. Online as a whole still commands less than ten percent of total ad spending, in spite of the fact that consumers spend more than 25 percent of their media consumption time online. Individual advertisers are accelerating their internet spending dramatically, however. HP, for example, dedicated more than 20 percent of its worldwide ad budget to internet this year, while more than doubling the number of sites bought.

Mary Bermel, HP’s Director, Global Interactive, showed IAB members how HP succeeded with viral marketing, and her counterparts from BMW and Diageo shared examples of empowering consumers to interact with their brands in ways that bode well for user generated content (UGC) sites. In just a year, marketers have turned from fearing UGC to embracing it.

No IAB speaker better exemplified this newfound respect for UGC than Fox Interactive’s Chief Revenue Officer Michael Barrett. His informative presentation on making money from UGC included this impressive stat: MySpace.com’s new performance advertising unit will produce well over $100-million in its first full year. He advised publishers to build their own sales force to sell performance advertising, work with third-party networks, and watch what it can do for them.

With success comes additional pressure on the most prized inventory and on prices across the board. Keynote speaker Jack Myers, a well-known media researcher and pundit, called attention to how “we are embracing media commoditization” with the help of media exchanges. Publishers, says Myers, need to decide their position on using exchanges and then figure out how to make best use of them to meet their sites’ revenue and operational objectives.

Moderating a panel on sales strategies best practices, Scot McLernon, SVP of Ad Sales for CBS Interactive, said that behavioral targeting, a major monetization theme for the past three years, may have been supplanted this year by yield management. Peter Naylor, SVP Ad Sales for NBCUniversal Digital, defined yield management as being about “stimulating sales behavior by adjusting rates up and down.”

Leaving IAB after five years as its CEO, Greg Stuart summarized our medium’s success this way: When it comes to online, it’s not “if,” it’s not “why,” it’s “how.” Now publishers have a chance to demonstrate “how” to more marketers who will be spending more than ever on online advertising.

Are you ready for another big year? If you’re a member of the Right Media Exchange (RMX), you can be confident that you’re ahead of some of the most advanced thinkers in our business.

This entry was posted on Thursday, November 30th, 2006 at 11:58 am and is filed under About Right Media, Right Media Exchange, Advertisers, Publishers, Ad Networks, Publisher Media Exchange, Agencies. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.