Thursday, March 1, 2007

Banner Advertising 2.0

This is ultimately a CNN Money story about how display advertising is evolving into a algorithmically-oriented exercise in exactitude in general, but the most compelling part to me is the first part that discusses how agencies are using such algorithms to make creative adjustments to banners on the fly, meaning elements like colors and copy. The article doesn't talk about the format of the banners that can be changed in this manner -- I assume it's a rich Flash-based format -- but it sure is a lot different from the days of begging and negotiating for creative and IT resources to set aside a few hours here and there and make simple changes to your banners for testing purposes.

Many senior management types believe that online marketing success boils down to negotiating ever lower rates for the media purchased as the path to lower CPAs and higher revenue margins. But until you get to a certain spend level -- at least two commas of spend per month -- online media is generally a transparent marketplace where you know whether you negotiated a rate that's too low -- in such case, your ads simply won't run. Yahoo might write Class 2 IOs for 10¢ CPMs -- the inventory simply won't clear unless no other advertiser is purchasing the allotted salable inventory for higher rates.

One thing that leaped out at me in this story: Yahoo digests about 12 terabytes of data from user interaction every day. That adds up to almost 4.4 petabytes a year.

Did you even know what a petabyte was before today? Neither did I.

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