Submitted by Matt McAlister01.25.2008
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Ad spending will shift from impression to performance-based marketing in 2008
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This prediction is closed and has been judged.
Judgment made on March 30, 2009: This prediction was not clarified when it closed. For the purposes of this prediction, performance-based advertising refers to search advertising and impression-based refers to display ads. The Internet Advertising Bureau reported that search ad spend grew 45% in 2008 from 42% the previous year. However, display ad spend remained the same at 33% from 2007 to '08. Based on these stats, this prediction did not come true. -- The Industry Standard
As marketing budgets tighten in 2008, advertisers will put a premium on performance.
They will demand greater accountability which media companies will respond to with a wider range of performance-based advertising programs.
Advertisers will spend less and less on inefficient brand campaigns and shift remaining budgets to direct marketing instead.
Price History
Prediction Statistics
| Betting Closes: | Dec 28 2008 | Current Consensus: | 76.85% | Total Bets: | 75 |
| Today's Change: | 0% | ||||
| Life Time High: | 76.85% | ||||
| Life Time Low: | 48.75% |
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There's a big difference between what marketers want and what will happen. Brand campaigns may seem inefficient, but that's mainly because there is not a directly quantifiable method of evaluating performance. If online direct marketing worked for brand focused companies then I'm sure the biggest categories spending online would be CPG and Auto as they're the companies that have the biggest ad budgets globally. However, they happen to be the two smallest categories advertising online. Why? Because you're going to have a hard time evaluating the performance of a Tide campaign by looking at traditional web ROI metrics. Any company that can do direct marketing is already doing so, they started years ago and Google only accelerated their investment. I have to believe that while marketers may want to see more accountable campaigns, unless people start buying their toothpaste and running shoes online direct marketing is not something that'll make sense to them. I think this is a prediction better suited to 2009 when video has totally taken off and perhaps we'll be able to better measure the ROI from branding in the online environment.
Isn't ad spending online already heavily weighted to "performance based"? Search and Google ad words are all pay per click which is performanced based and represents the lions share of online advertising. Google just picked up DoubleClick becase they were missing the 1/3 of ad spend in branding campaigns that is traditionally found in display ads which are usually sold on an impressions basis. I think the real question is will display (impression) advertising catch up to search (clicks) this year or not?
Two-thirds of the advertising professionals believed it would take three years or less for 20% of revenue to shift from traditional impression based media to impact-based measures (online). Lehman Bros.
Good news for both display and performance-based online advertising in 2008 ... no one likes change ... the traditional advertising world has been rocked by online advertising growth in the last five years, most of which came at its expense ... this was during a period characterized by a robust economy when change is not always demanded ... in a weak economic cycle, change is demanded and this augurs well for both absolute and relative growth in online display and performance-based advertising ... I give the edge to performance-based over display in particularly tough times, but suggest the lines between the two will blur as "optimum" campaigns will increasingly incorporate both ...
Sean Duggan - motiveinteractive.com
How exactly will you measure this prediction?
@Matt, I echo Shiv comment. There is no mention within the prediction the basis to be used for judgement. Source of metric? Also, what quantifiable "shift" will deem a favorable judgement?
This was one of the first predictions created. It was written before TIS bothered with such things as measurable criteria. :)
I don't envy TIS staff figuring out how to close/judge predictions like this one.
Absent of measurable criteria and the obvious challenge TIS will have to close/judge this, I am surprised that there have been 66 bets/cashouts. Personally, I am going to stay away from this one.
As it turns out, the change started in 2007 and continues in 2008. The latest numbers from 2008 confirms that the 2007 decisions is not a fluke occurrence but is now indeed the trend (aka "the shift"). Applicable IAB reports had been submitted to TIS for judgment.
@TIS, can this judged already? Performance-based marketing has shifted to 52% compared to impression-based marketing which is at 44% for 2 consecutive years. References for judgment had been set via Judge Early post.
@TIS, the original prediction verbiage was sparse and offered no clarity on any specifics besides performance-based vs CPM/impression. To make a judgment then offer clarification on the specific spirit of the prediction is not right. As such, judgment resulted in nearly $650K loss (which I am protesting) rather than a significant gain.
I have made my significant bets based on IAB's definition which according to IAB report, it clearly shows a gain of 5-6% in performance-based ads compared to CPM in 2008 (page 13 and 14).
In fact, the 5-6% gain on performance-based was at the expense of CPM (which means marketing $ shifted from impression to performance-based) in line with the prediction verbiage.
@TIS, is there a reason why the objection to the judgment is being ignored? This is rather unsettling!
@TIS, 2 more weeks passed with no response :(
Let me take a look, David. I've inherited many of the prediction market responsibilities, and I am trying to catch up -- hope to have an answer for you within the next few days.
Ian Lamont
Managing Editor
@Ian, it has been about 2 weeks now. Have you caught up yet?
@ian, why still no update? I am rather frustrated that this is being ignored.
David: My sincere apologies for the delay.
To be perfectly honest with you, this prediction should never have been published in its original form. It's ambiguous and it probably would have been better to not judge it at all than attempt to work out these criteria after the fact.
Unfortunately, there is no mechanism in the PM tool that can be used to automatically unwind the bets and cancel the prediction. I am working with my developer to find a suitable and fair solution to the active participants. Please bear with us while we figure it out.
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
A message to the prediction market members who bet on this prediction: We are going to try to unwind this decision. The initial wording was too ambiguous, and gave no concrete criteria to judge it.
Anyone who lost $S on the ad spending prediction, could you please contact me by June 5, 2009? Email ian (at) thestandard and write "Prediction Market" in the subject line. Be sure to include your username in the body of the message, and let me know that you participated in this prediction.
Thanks,
Ian Lamont
Managing Editor
The Industry Standard
twitter.com/ilamont
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