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Jim Meyer is CEO and co-founder of Mindset Media, an Internet ad network for brands.

Using its proprietary psychographic standard, Mindset Media lets brand advertisers target millions of people with the personality traits that fit their brands in simple online media buys.

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Is Microsoft On the Road to Nowhere?

Written on
May 5th 2008
Author
by Jim Meyer  |
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microwhoo_small.jpg“And the future is certain
Give us time to work it out.”
- Talking Heads, 1985

ADOTAS EXCLUSIVE — Microsoft’s pursuit of Yahoo has drawn into sharper relief the battle lines on a two-front war for digital ad supremacy. On one front: search, and its mighty master Google. On the other: the potentially enormous market for display advertising, currently led by Yahoo, but still very much anyone’s game. By adding Yahoo’s business to its own, Microsoft hoped to create a clear leadership position in display advertising – and buy itself some time to get more competitive in search.

Without the Yahoo deal, Microsoft must act quickly to solidify a strategic stronghold in display, or risk losing the war before it even starts. Google has no intention of conceding on display, as its acquisition of DoubleClick last year made abundantly clear.
Unlike search, which is largely driven by direct response advertisers attempting to intercept people with relevant messages close to the point of purchase, display advertising is ultimately all about brands. Brand advertisers are concerned with building awareness and interest ahead of the point of purchase — and brand advertisers are conspicuously under-spending on the Internet.

American adults devote nearly 20% of their time with major media to the Internet, and yet brand advertisers spend only about 4% of their estimated $300 billion ad budgets online. Achieving a share of spending commensurate with consumer attention would increase online brand spending by nearly $50 billion and transform the media industry in the process.

Blue-chip brand marketers recognize the disparity between share of audience attention and their online spending as a dangerous gap, but the Internet often seems too fragmented, complicated and undifferentiated to attract a meaningful share of brand spending. There’s no doubt that the recession is driving brand marketers to shift more dollars online, but the shift is mainly in pursuit of simple efficiency. But the Internet has yet to define its unique media value and its true point of difference for brands. Until it does, the tide will not really turn.

The answer for the Internet and brands must certainly lie in new forms of targeting made possible by interactivity. Brands have been slow to adopt behavioral targeting because the segments tend to be small and lack standardization across providers. Online media providers that can define and standardize relevant segments for brand advertisers – and deliver those segments on a mass scale without privacy issues – will get off the road to nowhere and win.

Time will tell (soon!) if Microsoft can summon the moxie to fight.



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