Monday, April 28, 2008

User-Generated Content vs. Online Advertising

While companies continue to move their advertising dollars online and away from traditional media, there are growing concerns over User-Generated Content (UGC) and how it can affect the image of their brands. Studying the trends in ad spending on such sites, eMarketer projects modest growth over the next few years; but can online advertising find a sustainable presence on social networking sites originally tailored to connect and create open interactivity between end-users?

As the leading online advertising company, Google has reported better than expected earnings, while News Corp’s stock has been downgraded due to the poor performance of its property, MySpace. This dichotomy can be attributed to many marketers’ reluctance to place their brand alongside unpredictable or questionable content. Interactive technologies and online platforms continue to grow, but can advertisers seamlessly adapt and integrate their messaging at the same rate?

Nielsen Online has recently introduced VideoCensus, an online video measurement service used for demographic research. According to preliminary findings, women are more likely to visit network television websites, while men are drawn to consumer generated media. This method of online consumer measurement may prove especially useful in niche marketing, especially in terms of branded video content or communications directed specifically to women.

One model for the future of communications comes from Casaleggio Associati, which outlines the eventual transformation of the web and its effect on old and (relatively) new media. This hypothetical provides a blueprint for corporate and business communications in the developing digital frontier. Through consolidation, online advertisers may better control the manner in which their message is presented.

If and when technology reaches the point in which online advertising is determined by the end-user, it becomes the responsibility of the marketer to understand how and why the consumer interacts online. This can be seen as a challenge, but the application of emerging technologies may prove to be an important asset for companies looking to reach users.

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