10 digital trends that will dominate in 2011

ARTICLE HIGHLIGHTS:

• DSP spending is at 10 percent of total U.S. display and predictions say that could rise to 50 percent within two or three years
• Publishers and marketers are increasing efforts to control and monetize data themselves
• Technological innovation will continue to drive new creative and groundbreaking executions in advanced rich media

About a year ago, I published an article where I bravely (some might say recklessly) identified the 10 technological trends that would impact digital marketing in 2010. The good thing about such an undertaking is that you can't be proven wrong -- that is, unless you remind people to look at it again a year later. Nevertheless, as 2010 came to an end, I decided to revisit my old list and come up with a fresh one for 2011. If 2009 was the year of global recession, 2010 has been a promising year of "rejuvenated growth" in digital media. Everywhere we turned, new companies, products, and possibilities began to emerge. Here are a few that ignited in 2010 and will blaze through 2011.

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1. Media trading and public exchanges
   A year ago, demand-side platforms (DSPs) were a novelty; today they are a power to reckon with. In a recent post, Adam Cahill of Hill Holiday estimated DSP spend at 10 percent of total U.S. display and predicted that it could go up to 50 percent within two or three years. It is somewhat of a surprise to see most DSPs closing 2010 as independent companies. As this segment matures, we can expect to see mounting pressure from buyers to increase transparency and decrease margins. In 2011, we will also see growing support for mobile, video, and rich media over real-time-bidding (RTB) exchanges (e.g., Microsoft's advertising exchange for mobile, BrightRoll's video exchange, and adBrite's video and rich media exchange).
   
   
2. Private exchanges. Parallel to the growth of public exchanges and DSPs, agencies and publishers have been actively pursuing an alternative solution -- one that would retain the efficiencies of a public exchange, yet provide qualified media opportunities to agencies and help publishers protect inventory grading and avoid channel conflict. For most of 2010, the idea of private exchanges was nothing more than a dream, but it is quickly materializing with both publisher-driven solutions like the one announced recently by Weather.com and AdMeld, as well as with agency-driven solutions like Vivaki's private ad slots.
   
   
3. Social unrest. The social network is making serious waves, and it's not just at the box office. Facebook reportedly has about 24 percent of display ads (albeit only 9.5 percent of ad spend) and is well positioned to reshuffle the display space as we know it. Facebook's media buying application programming interfaces (APIs) have spawned a foray of search engine marketing providers like Efficient Frontier, Marin Software, Kenshoo, and Adobe SearchCenter into display. What we need to be aware of is that Facebook's strict serving, tracking, and data-sharing policies are disrupting the status quo among marketers, third-party servers, and publishers. If you thought social display was an easy segment of the notoriously fickle social marketing category, think again.
   
   
4. Proprietary data. We all know that data is king. However, it seems that data brokers like BlueKai and eXelate might be facing some serious challenges, as both publishers and marketers increase efforts to control and monetize data themselves. Massive efforts by agency groups to aggregate and leverage marketing data are reaching critical mass. Havas Digital's Artemis and WPP's ZAP are agency-created tools that enable optimization without requiring third-party data. More advertisers are starting to connect customer relationship management (CRM) data into integrated marketing platforms where it can be used to analyze performance and retarget consumers across marketing channels. On the publisher side, sites like Yahoo have developed new ways to leverage registration and visitation data to offer sophisticated targeting and optimization capabilities on top of their media.
   
   
5. Dynamic creative optimization (DCO) going mainstream.2010 was a good year for DCO. Kicked off by the Google-Terracent acquisition in late 2009, the consolidation trend continued in 2010 with the MediaMath-Adroit and Yahoo-Dapper acquisitions. However, quickly following the hype was the realization that creative optimization is not an easy execution when done in a silo outside the main campaign workflow. Focus has shifted to execution, service, reliability, and scalability. As DCO makes its way into marketing mainstream, there are still some operational hurdles to overcome.
   
   
6. Remarketing heaven. Last year I discussed the benefits of combining media and creative optimization. Today this is done with great success by performance optimization companies like Criteo, FetchBack, Dotomi, NextPerformance, and Acerno (Akamai), which use media and creative optimization for retargeting, mostly based on cost-per-click (CPC) or cost-per-acquisition (CPA) models. Using quantitative methods, their success confirms the logical assertion that finding the right audience and telling the right story work best when done in concert.
   
   
7. Nailing down ad effectiveness. One of the main reasons big brands still have reservations about investing in digital ads is the lack of a global metric that can accurately assess brand impact and brick-and-mortar sales. For years, marketers have been reluctantly using brand survey solutions such as Dynamic Logic, InsightExpress, Vizu, and AdEffx (comScore), all the while waiting for something that would resemble the good old TV gross rating point. Nielsen seems to be listening; it recently announced a "major step forward" in online advertising measurement, aiming to move digital closer to the TV model. In 2011 we will see new ideas from companies focused on measuring actual consumer actions rather than surveyed attitudes.
   
   
8. Figuring out attribution. Measuring ad effectiveness is all about capturing the value created by marketing activity. The next logical step is to attribute that value to the different activities (channels, buys, etc.) in order to understand what constitutes success. Although attribution has been a hot topic for years, I believe 2011 will be a turning point where many more marketers, including brand-focused agencies, will effectively apply attribution modeling and gain a 360-degree view into consumer behaviors. Driving this trend right now are companies like ClearSaleing, Visual IQ, Coremetrics, Theorem, and others. It's key to keep in mind that there's no one "right" solution -- attribution is individual to the marketer and to the campaign -- and almost always requires customization.
   
   
9. Mobile display. As always, mobile marketing remains as challenging as it is promising. The wild fragmentation of devices, technologies, vendors, etc., makes any mobile display campaign a small nightmare. However, there are reasons for optimism. Nielsen predicts smartphone penetration in the U.S. will cross the 50 percent line in 2011. Using Adobe Flash 10.1 and HTML5, one should be able to achieve significant reach relatively smoothly. With the increasing acceptance of buy-side third-party serving (unfortunately still excluding iAds), marketers can even start thinking about managing and tracking mobile together with other portions of their media plan.
   
   
10. Basic rich media. Advanced rich media executions have secured a distinguished place in marketers' minds and wallets. Technological innovation will continue to drive new creative and groundbreaking executions in advanced rich media. But, it's also important to recognize how far basic rich media has evolved as well. The "do-it-yourself" wizard-like tools allow users to create templated ads utilizing basic rich media formats and features, including panel expansion, video, etc. In some cases, ads are constructed automatically using existing web or other assets. Companies like AdReady, ClickTurn, iPromote, and others have been promoting this category to marketers at a cost-friendly price. The low price point opened up rich media to both marketers and publishers, which traditionally tend to stick with standard banner ads.

With all that and much more going on, we can expect 2011 to be as exciting (and confusing) as 2010. Let's meet again in a year and see what 2012 will look like.

Eldad Persky is VP of products at MediaMind (formerly Eyeblaster).

10 digital trends that will dominate in 2011 - iMediaConnection.com