Three new banner formats sanctioned by the Online Publishers Association (OPA) have gotten the green light to debut on CNN.com, NYTimes.com, WSJ.com, ESPN.com and other OPA-member sites with a combined audience of over 108 million monthly visitors and 66% of the US Internet audience.

The specs:

• Fixed Panel: 336 x 860; follows the visitor down the page
• XXL Box: 468 x 640; expandable for video and with page-turning capability
• Pushdown: 970 x 418; unfurls to take over most of the visible page but then rolls up

While not IAB standards, the move has been welcomed by the IAB, which has been pressing for ad format innovation as a way to lift the display ad market out of its current slump.

No word on when exactly the ads will be rolled out; I haven’t seen them in the wild yet on any of the sites that are supposed to launch them. It will be interesting to see if they’re well-received by site visitors. If they are successful, expect to see new sizes and formats to proliferate with the blessing of the industry bodies.

Despite all the purported death knells we’ve been hearing, maybe we should drag ourselves back to the real world and realize the current economic downturn, and its concomitant slowdown in the online advertising market, will not last forever. Sure, weaker companies will be pruned away, there might be some consolidation, and those who make it through will have to pare back their growth projections, but only in the short term. The numbers simply point to strong future growth.

Let’s start off with a few interesting figures that have appeared in the last few months:

• online advertising accounts for about 8% of all advertising in the US
• however, it accounts for about 20% of all advertising in the UK
• Americans spend 30% of their leisure time online, compared to 28% among Brits

Maybe it’s not that the US advertising market needs to catch up, but the UK online ad bubble needs to pop? Maybe.

Interestingly, in Deloitte’s annual State of the Media Democracy survey, TV is considered, across all surveyed geographies, as being the most influential media format when it comes to their buying decisions, followed by online in some countries (Japan, Germany) and magazines and then online in others (US, UK, Brazil). Radio advertising ranked lowest.

Why? Maybe it’s a matter of the sophistication and sensory impact of advertising, which is still indubitably the domain of television.  It also could be a factor of reach: blog advertising is relatively influential in Japan, where blogs are exceedingly popular.

In either case, this bodes well for Internet advertising, where innovation and broadband connectivity are boosting the sophistication and depth of engagement of online ads, and where consumption patterns are favoring online media consumption growth at the expense of more traditional media.

You might have remembered that mid-last year Google announced that it would allow 3rd-party networks to serve ads through its platform. What this meant, in practice, was that Google offloaded a lot of Doubleclick inventory onto its AdSense publisher base. We noticed a large uptick of AdSense ad spots on the top 100,000 Websites suddenly serving Doubleclick ads in the second half of November 2008—the number of AdSense ad units serving up Doubleclick inventory more than quadrupled.

What a tighter AdSense-Doubleclick integration also allows is display/rich-media formats innovated by the latter to be displayed across AdSense’s vast publisher inventory. Google has just announced on its official AdSense blog that it will begin to show expandable ads, naturally, as third-party ads that publishers must set their accounts to allow.

In the post, they make it clear that while visitors can provide easily-demonstrable engagement with the ad by choosing to expand it, publishers are only paid if a visitor clicks on the ad to taking it to the landing page. No word if Google if remunerated by its advertisers by the same metric.

Here’s what’s been percolating in the news over the past week:

• Overall growth dismal: IDC is predicting the first contraction in online ad spend in Q1 since 2001, and negligible growth for the year overall. Q1 is expected to be -5%, Q2 even worse, with a slow recovery starting mid-year.
• Local ad spend will continue to shift online: Traditional local ad spend (TV, radio, direct mail, etc.) will continue its inexorable decline, according to BIA’s Kelsey Group, while growth in local online spend will not offset an overall drop through 2013. Local digital advertising is predicted to grow from $14 billion in ‘08 to $32 billion in ‘13.
• Consumers pay attention to online ads at night: Lightspeed Research and IAB say research demonstrates that online consumers are receptive to ads in the evening, with younger visitors growing in their engagement as the day went on, while older visitors maximizing their interest in the p.m. hours before and after dinner.

The Interactive Advertising Bureau, of which YieldBuild is a member, held its annual leadership meeting earlier this week in Orlando, and I had the pleasure of attending. The tagline this year, Brands Battle Back, reflected the sentiment that agencies and publishers must fight back against the commoditization of their services to their clients, the importance of which is underscored by the dismal macroeconomic and overall industry climate.

You got the sense that the organizers picked up on some tensions between creative agencies, interactive publishers, and ad networks, as the boundaries between what each offers becomes blurrier. At the same time, the degree to which creative talent and brand understanding—agencies’ domain—and the growing influence of analytics and performance-based metrics are at odds with each other depended on who was on stage.

Recurrent themes:

• Creative is the key… Keynote speaker Wenda Harris Millard (Martha Stewart Living Omnimedia’s president & chair of the IAB board) put the onus on marketers to tap into their creative talent to reinvent the forms of engagement necessary to invigorate digital advertising. A press release was released as well announcing the formation of an advisory board that will inject “emotional” and “culturally significant” creative talent into premium online advertising. In a debate on the final day, Jean-Philippe Maheu, Chief Digital Officer, Ogilvy & Mather Worldwide, stated that agencies have and will continue to attract the best creative talent, securing their value for high-end clients.
• …but technology is critical as well. IDG’s Bob Carrigan stressed that traditional media advertising has to evolve to today’s technological reality or risk extinction. David Payne from ShortTail Media said that metrics must change to represent the value media is providing to advertisers. Terence Kawaja from GCA Savvian said that the metrics that are meaningful to marketers and publishers aren’t yet the same (marketers care about the sale, while publishers care about the size of the audience), but that presents an opportunity to create a common language. Google’s president of display advertising David Rosenblatt said that his company’s success derives from its commitment to operational efficiency and producing measurable results.
• Reducing friction. The IAB released plans to simplify the process by which ad orders are placed, tracked, and reconciled, and set up task forces to eventually set standards regarding data ownership and contracting between publishers and agencies. This is obviously an effort to reduce the complexity and time associated with moving campaigns forward simply and quickly, something successful ad networks have been doing for a few years.

One odd session featured people from the NYTimes.com team touting a 38% increase in visitors through a better digital experience. The entire time I was wondering exactly when NYTimes.com made its content free (about a year and a half ago). Let’s be honest—the NY Times has always been a newsmaker and their first-run news and exclusive feature and opinion content makes them excellent linkbait.

Right now, long-term (10 years) inflation is forecasted at less than 0.3%.  As long as inflation is very low and inventory growth continues to outpace advertisers’ budgets allocated to online advertising, then rates will decrease for CPM-priced ads.  Publishers need to create content acquisition models that will work with the current monetization available from ad networks.

Anecdotal evidence suggests that pure CPM-based buys across ad networks have decreased in favor of performance-based models (CPC and CPA, primarily).  For certain publishers this has caused a dramatic drop in the performance of their remnant inventory since the offers are much more heavily weighted to performance-based deals now (the CPM portion has dried up).

Our suggestion is to work on creating traffic that responds to performance-based ads (topical content that draws natural search traffic) and to cut costs if you are dependent on CPM ads.

Paul wrote a couple of weeks ago about how some ad networks are taking on some of the creative development services of ad agencies as they look to expand the level of campaign engagement they offer their clients. With the announcement a couple of days ago of Sportgenic Torque, a product whereby clients of this active sports-oriented vertical ad network can also buy in other media (including TV, events and print), we see that cross-media campaign management can be another way by which well-positioned vertical ad networks can tread into agencies’ turf.

In some ways, a small vertical ad network with heretofore limited reach into online only might be a surprising place for advertisers to turn to when broadening campaigns into different offline channels. Advertisers turn to agencies not only for their creative development expertise and access to media distribution, but also for their ability to coordinate complex campaigns. Online campaign management has been a relative weakness, the establishment of ad network arms like Publicis’s VivaKi notwithstanding.

So what’s the potential appeal of allowing an ad network manage all of your campaigns? It’s possible that publishers understand that, aside from the dismal growth we’re seeing now as a consequence of the downturn, online advertising will continue to be a larger piece of their ad spend in the coming years. Also, ad networks’ soup-to-nuts performance tracking can instill confidence in an ad network’s alignment with advertiser priorities as they look at media with more nebulous value to the top-line; advertisers can expect the same level of attention to ROI across their campaign. Finally,  an ad network might be the first entry point for smaller advertisers whose first foray into advertising began online, but have since sought to grow beyond. One could argue this is Google’s strategy in expanding into radio and (its now defunct) print.

Does this present a threat to the big agencies? Probably not. It remains to be seen how many of the vertical ad networks will manage through the ad market crunch. But if they do come out thriving, and follow a similar approach to Sportgenic, then the “death by 1000 cuts” might change the agency landscape substantially.

From our stable of publishers, the sites that have been hit the hardest in the economic crunch are sites with high visitor return rates that consume many pages per session.  They are down as much as 50% usually from the display ad (CPM) networks.  Sites in this category include social networks, blogs, rich media sites (photo galleries and video sites) and forums.

Sites that tend to get the majority of their traffic from natural search (like our HubPages.com and other content sites), CPC rates are down about 8%.  We think this category of site is doing better during the crunch since the monetization model was always more performance-oriented, and traffic less reliant on a smaller base of routine visitors who might only have a passing interest in the site’s advertising.

My account management team and I have spent a lot of time talking to publishers large and small, and this is what they are telling us what they want from ad networks.

Smaller Publishers

First and foremost, smaller publishers want more money, the current crunch notwithstanding. Second, they are tired of getting treated like second-class citizens by certain exclusive ad networks.  Just because they have less traffic doesn’t mean it’s not valuable traffic.  Third, they want to be paid on time, within 30 days–a lot of ad networks have lousy payment reliability.  Finally, they want transparency, especially when it comes to AdSense. Publishers have long thought their margin was being squeezed when Google needed to improve its numbers.

Large Publishers

Large publishers want better-quality ads.  They are trying to build a brand and are concerned about the flashy, poor-quality ads that reflect poorly on their site.  They’ll even take less money to get good brands with high-quality ads.  Staff and resources are getting tighter and they are quite frustrated with the fluctuations and the calls from ad networks to respond to their requests for impressions.  They want consistency and guaranteed CPMs.

This kicks off a series of blog posts sharing what we’ve been hearing from publishers and ad networks that we talk to. We often hear conflicting information, but everyone once in a while, the messages line up.

The word on the street is that publishers are reducing the number of ad networks they are running.  The main reason: they’re concerned about getting paid on time and have more trust in long-standing, well-known ad networks.  Reason number two is that they are finding the complexity of managing ad networks grows with each additional ad network.  While it’s easy to try new ad networks, the performance of many has fallen way off and it makes less sense to use more ad networks when the performance is more-or-less the same as using fewer (at least from the perspective from your average publisher who is managing all of this on his/her own).

The trend is definitely moving to less is more (when it comes to ad networks) for publishers.