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INDUSTRY OVERVIEW

The online advertising industry has become a prime driving force. More traditional agencies and advertisers are pursuing to achieve their brand building, marketing and advertising goals via the online media campaigns, gradually shifting from traditional media such as television, radio and print. Part of the shift can be explained by the growing online audience, as a multitude of new websites and quality content are added/created with each passing day, and 'browsing the internet' has become the new favorite national pastime, beating that of Television viewing recently. According to a recent TouchPoint's (3rd) study conducted by DoubleClick, the Web bears more influence over consumer purchases than TV and print ads. Another reason for the growth is the ability to target and reach a specific audience and measure the success of a marketing campaign by identifying actions (whether a click-through, form submission, sale, etc.) that is directly attributable to the campaign's success. A May-2005 Forrester Research report states:

Consumer broadband adoption has made the Internet a pervasive influence in users' lives. Marketers have responded by pushing more of their budgets online…The $26 billion that marketers will spend in 2010 in online display ads, email, search, and classified ads will represent 8% of all advertising spending - rivaling spending on cable/satellite TV and radio. Almost half of all marketers plan to increase online ad spending by decreasing spending in other channels.

Goldman Sachs recently dubbed 2005 as the "breakout year" for online advertising and expects the market to reach $12.3 billion. Goldman also estimates that 59 percent of homes with Internet access will have broadband this year, opening up the floodgates to new rich media advertising channels and possibilities. In June of 2005, Merril Lynch projected online ad spending to reach 12.4 billion for this year with more than 40% attributable to performance-based advertising. Clearly performance based advertising is beginning to play a bigger role on the interactive arena.

Right after the internet bubble burst, with the Cost Per Millennium (CPM) banner ads suffering drastic fall in prices and a general new-found sobriety of the online community, the advertising model started shifting from Pay-For-Traffic (i.e. - CPM) to Pay-For-Performance (PFP) (i.e. - CPA, CPL, CPC). Ever since then, the shift to PFP has redefined how businesses market online. The PFP market has emerged as an ideal method for advertisers to get to their consumers via the web since their advertising budget expense is not measured by the intensity of broadcasting ads but rather on obtaining customers. For large advertisers, PFP is an ideal ad medium since they achieve two goals for the price of one: Branding and Customer Acquisition. Since publisher is only paid for a specific action, the display of the product or company brand automatically constitutes branding. Publishers also emerge as winners since they are able to present their site audience with highly targeted offers that at times help publishers earn as much as hundreds of dollars per action.

ROI Matrix serves as the connection hub between Advertisers, Agencies, and Publishers that provides them with the necessary tools to run an existing or an intended ad campaign, manage existing ad inventory and achieve their online marketing and revenue objectives. Despite recent growth, the interactive ad industry is still in its nascent stages and is one of the few that were unaffected by the immediate aftermath of the internet bubble, attesting to its strong resilience and proven success. By joining ROI Matrix, advertisers and publishers alike are empowered and are enabled to employ online media to achieve their respective goals via the profitable pay-for-performance model.

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