Web Advertising Is Booming?

Gary Vaynerchuk, one of my role models, has just posted a video explaining how web advertising is going to explode.

http://garyvaynerchuk.com/2008/10/08/you-down-with-roiyeah-you-know-me/

Gary points out 3 very important reasons why he thinks this is going to happen:

1. Web advertising is a better Return on Investment (ROI) than traditional advertising (magazines, newspapers, etc.). An interesting statistic (not verified) that he pointed out was that getting an ad into the back of the New Yorker was an $80,000 expense. That's about 3 times the amount of money I need to start my company.

2. You can track web advertising.

3. People would gain a lot more for their investment if they just hired 30 interns to stay on social media sites and spread the word virally.

In my own analysis, I think that there are still merits to traditional advertising, mainly because a lot of people are not as social media savvy as Gary or me. But, I do believe that if these big companies are smart, they will start shifting a heavy portion of their advertising budget to the web space.

And really this doesn't have to just be simple CPMs banner ads. The problem with advertising is that the majority of the public is largely desensitized by simple banners, that was for the 20th century. In this new era of social media companies have to start realizing that there are so many ways to leverage online monetization to get much better ROIs. Here are my top 3:

1. Pre-roll video ads

Having to watch the same f-ing advertisement on Hulu 3 times for every show is huge branding. Not only does it use repetition to make the message stick, the advertisers are in the background of the player the entire time.

2. Page takeovers

Look at Pandora and MySpace. By taking over the whole page, there is no way for the user to ignore the ad. While annoying, it is extremely effective and cost effective.

3. Sponsorships

Give me $80,000 and I'll make you a game that gets 500,000 downloads. The physical interaction of playing a game associated with a brand is much stronger than some subliminal message that is usually blocked out by traditional media.