SpectatorBytes

Some interesting news came out GM today (see GM roars Forward Into Digital Ad Channels). This suggests brand advertisers are finally ready to commit significant spending to digital media. This is certainly good news for the industry, and in particular for companies that are creating solutions specifically designed to serve brand advertisers.

GM’s decision is probably the result of several factors:

1) Digital media offers on-demand reach (i.e., advertisers can reach “super bowl-like” audiences and targeted niches); another way to look at it is to say that audiences have shifted their consumption away from traditional media

2) Digital media allows advertisers to engage audiences and translate that engagement into a tighter bond with their customers

3) Digital media enables the creation of mass and highly-targeted campaigns cost efficiently

4) Digital media is measurable (i.e., metrics to determine engagement)

It is likely that most other brand advertisers will have similar goals to those of General Motors. So, how can we take advantage of the expected wave of brand advertising?

We can do that by focusing on satisfying the needs of brand advertisers. Today’s ad networks do not seem to do that adequately. The limited brand dollars in the system certainly suggest that. The current online ad ecosystem has been mainly built for direct marketers. Solutions are designed for scale and quick response. Sales forces are optimized for selling broad networks rather than targeted environments, creative has been fine-tuned for generating actions/clicks, and talent in the industry consists primarily of direct marketers.

This environment creates opportunities for companies to develop solutions specifically designed for brand advertisers; solutions optimized for brand building and deep engagement. Creative needs to deliver on brand building and consumer interaction. Sales forces need to offer more “transparent” networks - brand advertisers like to have a choice about where their ads show up. Reporting needs to “engagement-specific” metrics (rather than simply UUs, UVs and CTR).

What has changed that this is now more likely to happen than before? Technologies and overall infrastructure advances create a better environemnet. It has become cheaper and easier to create engaging experiences (i.e., video, audio, graphics). Bandwidth penetration allows the deployment of these richer experiences at scale, and there is a broad diversity of well-targeted vertical sites (vs. generic portals).

As I have mentioned before, video advertising is likely to initially be one of the major beneficiaries (see Brand Revenues: What will it take to move brand advertisers online?). Beyond video, companies that offer new formats will also emerge as big winners — other than “rich media banners.” For example, some widget companies can turn widget-applications into new ad format for brand advertisers. Lastly, vertical networks are well positioned to serve brand advertisers.

All in all, the next three years are likely to be pretty exciting for businesses designed to funnel brand dollars into digital media.

Do you agree? What companies do you think have interesting offerings for brand advertisers?