There is a huge transformation underway. The way we live our lives and how we spend our time is changing, drastically. The young generation is growing up in the information age with tools and mediums that weren’t available (or not nearly advanced) just ten years ago. The Internet, social media, instant messaging, voice over IP, mobile phones, online video, user generated content (creation and consumption), video games and virtual worlds just to name a few. Kids and teens are spending less time watching TV and more and more time consuming content, being entertained and communicating on these new media platforms.

What does this mean for TV and TV advertising? Well, simply.. with less eyes watching traditional TV there is going to be a drop in advertising budgets. Conversely, more eyes and more hours spent online should see a shift of advertising budgets towards the online world.

Enders Analysis is reporting this week that UK online ad spending will overtake television THIS YEAR. The transformation is happening quicker than most expected.

Reuters also reported and has a good article here.

Application and widget developers are always looking for more reach for usage of their apps.  We are finding that many app companies first on facebook due to its first mover advantage and (relative) maturity of the platform.  As we know, facebook is growing and expanding to many markets but there are other social networks in those markets that are more esablished.

hi5 has a broader international user base and is growing quickly.  According to Comscore, hi5 now has 45 million monthly visitors (April 2008).  The initial reviews of its 3rd party application platform are very good and hi5 is becoming an increasingly important social network for application owners.

Ad Chap can now monetize applications on the hi5 platform as of today.   Developers / publishers can set Ad Chap ads to run on your hi5 app immediately through the existing Ad Chap interface.

To enhance reach for both publishers and advertisers, we will continue to add more social network platforms to Ad Chap in the near future.

Here at Ad Chap we are bullish on both online advertising and global social networking growth. As advertising online gets more sophisticated, advertisers are able to better target their audience, get better stats and see more measurable results. This is bringing a larger share of advertising budgets online.

US Internet Advertising Revenues Top $21 Billion In ‘07, Reaching Record High. In this May 15, 2008 report by the IAB (Interactive Advertising Bureau) and PWC (Price Waterhouse Coopers) they found:

• For the full year 2007, revenues totaled $21.2 billion, exceeding 2006 performance by 26 %, itself the former record year.
• Q4 2007 Internet advertising revenues hit $5.9 billion, representing historic revenues for a single quarter and a 24% increase over the same period in 2006.
• This is the fourth consecutive year and 13th consecutive quarter of record results.

“Despite the current state of economic uncertainty, 2007 was another record year and the 13th consecutive record quarter. Interactive advertising is not just the future, it is the here and now, as it represents a meaningful and growing component of U.S. advertising and marketing spend,” said David Silverman, partner, Assurance, PricewaterhouseCoopers.

Another point of interest from this report is that Internet advertising revenues surpassed Radio advertising & Cable Television advertising in total U.S. ad spending in 2007.

Since this report is USA only, it does not give the whole picture however. Another report from Aegis PLC and Carat shows GLOBAL online Internet advertising spend to grow 23.3% in 2008 with Russia, Eastern EU countries and the Asia Pacific region and Latin America charting the fastest growth worldwide.

North American growth is less stellar with USA projected to grow 3.9% and Canada to fare a little better at 7.2%.
Noting the lower growth numbers for North America, we have also been seeing reports in the news that social networking sites myspace and facebook are seeing user growth plateau. This has led many of the social networking bears to write “I told you so” articles about the sustainability of social networks. Not so fast!

We do believe that social networking use will be approaching the saturation point in the USA and some other developed markets in the next few years. For the rest of the world however, there is massive growth in social networking use happening.

We are looking forward to see what the future brings and believe that social networking and new possibilities for ultra targeted advertising are just getting started.

With the combined growth of online advertising spend and global social networking growth, we expect exciting times coming up for Ad Chap and social networking advertising.

Links
The full IAB - PWC USA Advertising Report is available here. http://www.iab.net/media/file/IAB_PwC_2007_full_year.pdf

The Aegis - Carat Global Advertising Report is available here. http://www.aegisplc.com/ags/media/groupreleases/grouprel2008/2008-03-17/

Application, widget developers and publishers are always looking to expand their reach to new markets, new users and customers.  One way to do this is to move to a new platform that has access to millions of users that are socially connected.  A very large network of socially connected ‘friends’ that are communicating, playing, listening, watching, posting, sharing and recommending worthwhile experiences to other ‘friends’.  In other words interacting.

100 million users interacting together in one place might be a good place for publishers to get their content in front of new users and grow their customer / viewer base.

A market like this is also a good opportunity for advertisers to deliver their message to potential customers in a targeted manor.

We now have the myspace platform live on the Ad Chap network.  Both publishers and advertisers can benefit from the addition.

Currently, access to the Ad Chap interface is available from facebook.  Advertisers and publishers can now access facebook, bebo and myspace from the Ad Chap facebook application.

Advertiser’s ads will automatically go out to all networks.

Publishers can manage their monetization for all of their apps across the facebook, bebo and myspace platforms.

Many advertisers have been asking lately if they can get more traffic on countries of their liking.  We want to let you know that targeted ads are delivered on Ad Chap according to each ad’s performance.  There are several factors that are taken into consideration but generally, if an ad is not popular and users have low interest in an ad, that ad will be alloted a lower priority and be shown less.  Conversely, if an ad is performing well and there is greater interest in an ad, that ad will be given a higher priority and be shown more. This happens for every country and region.  So an ad targeted to USA will not compete with ads in Canada for example.  The ads for the USA will only compete against other ads in the USA.  Non-targeted ads and regional ads will also get traffic to the USA in this scenario but generally these ads will generally get less USA impressions than an ad targeted directly to the USA in this example.  Unless of course the targeted USA ad is performing very poorly.  The best way to help your ad get better performance is to test.  Try changing the wording in your ad title and description.  Try some A/B testing to compare performance of similar ads.  In this way you can see what is working and not working and make changes accordingly to create efficient well performing ads with better ROI.