Rocky Seas for the Online Display Ad Market?
It is not so apt, if you think about it, that Yahoo has finally put up the details of its new system to let customers buy and sell display advertising–now called APT–right smack in the middle of the most serious financial meltdown of the modern era.
That’s because the economic crisis is likely to become a whirlpool that will be hard for any ad business to avoid, even the often recession-proof digital sector.
But it is Advertising Week in New York and, BoomTown supposes, the show must go on (it’s not as if they could suspend it, like a critically important Presidential debate or anything).
Actually, “ironic,” I suppose, is a better word than “apt,” because the existence of such a system–as a kind of Google-like way to deliver graphical advertising–is extremely vital to the next phase of the online ad game.
In Yahoo’s case, APT would service its sites, as well as big sites like eBay (EBAY) and several hundred newspaper sites, in what one can only hope is a cohesive manner rather than the patchwork way it is done now.
In order to reach many places across the country, for example, a national advertiser now has to potentially make hundreds of buys, which can be highly inefficient.
The other option is to use one of the too-many ad networks. But they often don’t let an advertiser know exactly where an ad is being placed, and it can sometimes create something called “channel conflict” between a publisher and an ad network.
This chaos has long been a problem in the online display business, which has been growing, although not with the same force or overall impact as the search ad business dominated by Google (GOOG).
Thus, the situation begs for clarity and for getting scale built into the system, which can only be imposed by big players like Yahoo (YHOO)–or Google or Microsoft (MSFT), both of which are working on their own systems.
Unfortunately, while the search ad market has a better chance to weather the current economic crisis, the online display market is a horse of a different color.
Many speakers at Ad Week underscored the obvious.
Former Yahoo ad head Wenda Millard, now co-CEO of Martha Stewart Living Omnimedia, said in a panel that the Wall Street crisis will have “pretty severe implications for medium-sized and smaller businesses and consumers.”
It was an opinion expressed by many others in the online space who attended the event, most of whom also tried to note in some fashion that the digital sector has a better chance to weather the expected slowdown than other media like magazines.
That might be so. But as one top digital exec correctly noted to me after the events of this week, which have deeply impacted banks and Wall Street firms, it will be hard to escape the suction-like pull of sinking ships:
“Like it or not, we’re all financial stocks now.”