What You Can Expect for Adland in 2012

What You Can Expect for Adland in 2012 | News – Advertising Age.

Four major trends to watch for in digital media in the year ahead
The engine of digital media — online display advertising — is firing on all cylinders. After several lean years, it was up 22% in third-quarter 2011. So if the good times are back, why are sellers of traditional digital media — including portals, publishers and ad networks — struggling? Two big reasons: Facebook; and real-time bidding technology that lets agencies and brands buy audience across the web.

The reality is that growth in digital-ad spending isn’t happening in display, and that’s hurting everyone — from the traditional powers of digital media to the online arms of media companies. Brands don’t want banners; they want deeper engagement through social media. With that in mind, we see four big trends in digital media for 2012:

1) Battle for “premium.” The question of who owns Yahoo should be resolved soon, but more important is whether Yahoo (with Microsoft and AOL) can create a so-called premium ad category by gating off inventory in private exchanges. If the approach works, expect a flurry of alliances between publishers to create scale for advertisers this way.

2) Accelerated consolidation. The battle to own the pipes for digital advertising is on, and Google is in the pole position. Expect Google to complete another sizable deal to fill out its product offering. Microsoft, which has spent the last three years obsessed with search, will also get back into deal-making by buying AppNexus for its exchange and real-time buying capabilities. Adobe will also play in this space, as will MediaOcean and perhaps a scaled data player, like Axciom.

3) Companies over features. Advertisers and agencies cannot do business with hundreds of different startups. This year a bright line will be drawn between those that can solve sticky marketing problems and those with features that might address part of the problem. Some will fire their sales teams and integrate into ad platforms like Google, AppNexus and others. Some — those with the least traction — will just quietly go away.

4) Muddled economics. More money will flow into startups chasing ad dollars, with ubiquitous “funds” adding to the venture-capital froth. Newly public and highly capitalized Facebook, Glam Media and Zynga will have the firepower to work with large brands, making competition even tougher for traditional publishers.