The online advertising market is estimated at more than $30 billion in 2011 growing at 22 percent annually based on Internet Advertising Bureau (IAB) statistics. What we are seeing is explosive growth of predictive-analytics based tools and applications to drive the creation of new targeted ad services.
Look over today’s announcement http://tinyurl.com/7tmmvsp that predictive analytics firm eBureau is spinning off its online advertising targeting business into a new company called TruSignal(TM) offering targeted advertising using proprietary predictive analytics and other tools.
All companies are interested in finding what we call the ‘significant few among the trivial many’ – I foresee many exciting developments and issues emerging here as we pursue this goal:
- Expect other online advertising companies to create separate, specialized analytics driven service entities – analytics technology is driving this trend, is highly specialized, and this is moving very quickly
- Different skills sets are needed as ad business moves to even more advanced analytics and visualization technologies- think of the implications for the online advertising sector looking for creative and ‘analytics-savvy’ candidates – new skill sets are needed now to secure and retain industry leadership
- Expect to see more analytics spin-offs in other sectors- the same model is occurring in the health care, financial services and others
Always important to look at how major companies respond to these changes (think response of Barnes & Noble vs Borders to the e-book revolution). How does a major ad firm, well entrenched in traditional print, TV, radio media, address these new trends- most are obviously committed to the social media revolution but new predictive analytics tools are changing the rules of the game, helping ‘find the significant few among the trivial many’ in ways not possible today.
As these services accelerate, and they will, I expect to see major firms ramp up internal efforts to develop competitive analytics services organically. These powerful services are evolving very quickly and I expect to see major industry leaders seeking alliances with creative innovation leaders in the predictive analytics market.
Paul B. Silverman is a Lecturer in the Robert H. Smith School of Business in the University of Maryland. He also serves as CEO of Sante Corporation, an early stage personal health care management company, and Managing Partner of Gemini Business Group, a new venture development and advisory services firm. He can be reached at firstname.lastname@example.org or via Twitter at @globalbizmentor