Spreading The Wealth

-By mike shields >> mshields@mediaweek.com

Media buying in the digital space is becoming much less concentrated—and much more complicated—according to Avenue A/Razorfish's just-released 2008 Digital Outlook.

Aside from pinpointing several trends to watch this year, the digital agency provides a detailed examination of 2007 spending, which exhibited a marked shift away from reliance on Web portals MSN, AOL and Yahoo in favor of spreading the wealth across numerous sites.

In fact, according to the report, the agency initiated buys with 1,832 properties last year, a 112 percent increase versus '06. Just 19 percent of the agency's $735 million in digital media spending went to the portals last year, down from 24 percent in '06.

The trend toward diversification was overdue, said Jeff Lanctot, Avenue A/Razorfish's senior vp, global media. "Consumers' media fragmentation online has been well established," he said. "Advertisers are starting to catch on."

One reason for that advertiser epiphany is the attention-grabbing mass migration of audiences to social networks. "That caused a mindset shift," said Lanctot. Though social-net sites have yet to enjoy a flood of ad dollars ("The ad model continues to lag behind interest," said Lanctot), their mega growth has provided compelling evidence that the average Web user is no longer surfing just a handful of large sites.

"It made buyers say, 'I've got to look more broadly,'" said Lanctot.

That said, big-name sites did dominate Avenue A's awards, which recognize top online publishers. Weather.com, ABC.com and Microsoft's digital ad solutions group were tapped as Publishers of the Year by the agency's East, Central and West Coast teams. (Since last May, Microsoft has owned Avenue A. An agency representative said the evaluation was based purely on Microsoft's ad sales prowess.)

As for the current year, the agency predicts a slowdown in the ad network acquisitions that dominated 2007. It also predicted that digital upfront events are unlikely to take hold, CPMs should remain steady and online spending is likely to keep pace even in a recession.

Meanwhile, the agency expects the media-buying process to become even more complex: less about buying ad space alongside content and more about "distributing experiences." Tactics include the building of portable, ad-supported widgets, launching brand profiles on social networks and creating branded viral videos. "The traditional ad sales model is dying," said Lanctot.

As for video, in spite of the hype, spending will see only incremental growth.

The lack of standard video ad units "is holding everybody back," said Lanctot. "Everyone is hung up on experimenting. We need to give ourselves a period of time to figure things out."