Future of Online Advertising Looks Like Video, Mobile…and Microsoft

3/24/10Follow @gthuang

Last night, we heard from a distinguished panel of executives on the opportunities in online advertising, at a TechFlash event in Seattle. The panel comprised some of the top names in the online ad world:

—Aaron Finn, founder and chairman of AdReady

—Brian McAndrews, former CEO of aQuantive, managing director at Madrona Venture Group

—Jeff Lanctot, managing director of advertiser and publisher solutions at Microsoft

—Charlie Tillinghast, president of MSNBC.com

Just a quick recap here. So what does the future hold? Where are the opportunities for startups, investors, advertisers, and publishers?

It’s clear things have changed a lot in the online-ad world since the heyday of three or four years ago. “It’s very challenging to have a business that’s based just on advertising,” McAndrews said. “For pure consumer Internet businesses, most ought to be thinking about multiple revenue streams.” To this end, he mentioned virtual goods—which I took to mean things like online currencies, electronic cards, and gifts (which are some options that Seattle-based BuddyTV has said it is looking at, for instance).

Finn pointed out that the term “ad-supported” means a lot of different things now. He cited Bellevue, WA-based BlueKai as a startup taking an interesting approach in the exchange of data between advertisers and publishers; it helps websites sell data on their consumers’ demographics or buying behavior to companies that wish to use the information to target their advertising more efficiently.

McAndrews said there are still opportunities in ad infrastructure as well—the technology of ad serving, “demand-side” platforms to help advertisers find places to pitch their wares, and “sell-side” platforms that might help media companies show off what they have to offer. Startups should think about products that are “bolt-ons to the bigger players, like DoubleClick [Google] or Atlas [Microsoft]. But to go head to head with them isn’t smart.” He also said there must be opportunities in working with consumers who are willing to pay hundreds of dollars a month in cable, Internet, and phone bills.

As for the rest of the panel discussion, I can’t be comprehensive. There was a lot of good information for people entrenched in the online advertising and publishing worlds. But here are my high-level takeaways on what the opportunities are out there:

1. Video

In the news world, Tillinghast said 20 percent of MSNBC’s ad revenue comes from video content, and it sounds like it’s growing fast. “Professional video seems to be a real strong point, and a defensible one,” he said.

“In video, content still is king,” McAndrews said. That’s opposed to online text articles, where it’s difficult to get even loyal readers to pay a cent. In entertainment, Hulu has done pretty well with … Next Page »

Gregory T. Huang is Xconomy's Deputy Editor, National IT Editor, and the Editor of Xconomy Boston. You can e-mail him at gthuang@xconomy.com or call him at 617-252-7323. Follow @gthuang

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  • http://www.owneriq.com Katie Frothingham

    And no mention of the retargeting and behavioral targeting space? More and more safe ways to anonymously tag internet users are on the rise.

    With Google’s acquisition of Youtube, more and more video results are showing up deeper in search engine feeds, good point re-corporate vids.