2009 was a big year at AdRoll. While we’ve watched display advertising come back into vogue, it’s been awesome to see our team innovate and develop the best display-based solutions for a growing range of SMB marketers. As we’re gearing up for another big year of growth, we thought we’d ask our own Adam Berke, VP of Business Development and Marketing, and founding team member here at AdRoll, to take a quick look forward at what he expects in 2010…

Attribution takes off
Microsoft has been beating the drum for engagement mapping for a while now, driven by their indignity of Google getting all of the credit (and $) for the “last click.” Despite their efforts, their message of attribution hasn’t really been embraced. That’s going to change.  As a recent Forrester report by Emily Riley points out, there are enough companies working on measuring and reporting attribution that someone is going to hit on something that’s easy to understand, and cheap enough to implement, and advertisers will finally take note.  It’s not a huge intuitive leap to understand that display ads can have a big impact; it’s just a matter of having tools to show it.  Even if most advertisers don’t actually implement attribution technology, it will become well enough understood to help display 2.0 take off in 2010.

Retargeting becomes a mainstay for all e-commerce advertisers
With results rivaling paid search advertising, retargeting is proving to be an essential, ROI-positive technique for brands of all sizes. Internet shoppers like to browse to find the best offers.  It’s been shown that 98% of them don’t convert on their first visit to an online store. Retargeting is an extremely efficient use of funds (ie, you are only targeting highly qualified window-shoppers as they browse cheaper inventory.) As more display inventory becomes accessible and efficient through ad exchanges, and retargeting ads themselves rapidly advance, 2010 will be the breakout year for this technique.

Ad networks actually consolidate
Over the past 2 years, industry insiders have loved to cite the unimaginable 300+ ad networks whose very existence is implied to be a crime against humanity. However, thanks to some tight relationships and the agency world’s slow adoption of new technologies (a whole other story) the presumed collapse of The 300 did not happen.  Well, with the launch of agency owned trading desks, DSPs, and Yield Optimizers aggregating impressions, the number of ad networks is going to decline.  It’s not just going to be obsolete vertical ad networks and undifferentiated arbitragers either; we’re going to see consolidation with the big guys as well.

We’ll swing back towards CPM as the preferred pricing model
If you follow conventional thinking, and the current trajectory, you’d assume performance-based pricing models would come to dominate the online media landscape.  However, there are a couple of factors that will not only change this trajectory, but will actually cause a pendulum swing back to CPM pricing.  This will occur because it’s the easiest way for savvy digital marketers who have proprietary data, or some other “secret sauce” to secure impressions that they know have particular value for them.  Along these lines, companies that buy media on behalf of end advertisers are actually making huge margins by charging on a CPA/CPL and arbitraging this through savvy CPM purchasing using cookie data, RTB, etc.  It’s just a matter of time before the end advertisers wise up, and ask that they see spend on a CPM basis.  This will make the margin the provider is taking more transparent, and ensure that the advertiser is not missing out on savings that come from effective optimization.  Good news for smart advertisers who know to ask for this, bad news for arbitragers.

At least one yield optimizer disappears/changes its business model
There are too many players, too much marketing that is way ahead of product, and too little value being created for all 5-6 to maintain the status quo.  The key to these models working is through servicing large publishers.  Small publishers have too little data to make it possible to optimize between ad networks, and it probably takes as much effort to bring one of them on as it does to bring on a large site.  Unfortunately, there’s a big storm brewing that will alter the relationship between yield optimizers and large publishers.  Now that yield optimizers are trying to reinvent themselves as ad exchanges, they’re basically creating channel conflict on steroids.  Channel conflict is the reason premium publishers decided to direct their scorn at ad networks this past year.  Just wait until they realize that yield optimizers are not only cannibalizing their direct sales by servicing buyers, but also have a disincentive to effectively optimize their remnant so they can sell it themselves to ad networks and others in order to keep more margin.  Sparks will fly.

A currently non-existent company will be both founded and IPO within 2010
Business cycles are turning over faster than ever with higher highs and lower lows.  Huge valuations are being handed out by former Russian enterprises to companies that sell weapons to mafia bosses (virtual of course.)  All the great stories lines of the next bubble are being written.  My working title for the movie:  Irrational Exuberance… this time it’s social.”