Ken Sonenclar, MD of DeSilva and Phillips, noted an earthquake in online ads, doubling in four years at min. Online ads are the only real strong growth area, someone is losing share, namely traditional media. Looking for dots to connect, Johnson & Johnson spent 24 million online, only 2 percent of ad spend, increasing online and moving away from TV, not attending TV buy meeting. Web 2.0 crowd doing just fine, making money by focusing on content and monetizing via ads.

Who's making money and how is focus of panel. Brett Brewer of Adknowledge, helps small and medium sized businesses to get bids outside of the search channel, advertisers bid on preset creative, creative always looks the same, bid to have their text associated with creative. Use behavioral targeting techniques. Company growing like a weed, did $13 mil last year, should double that this year.

Tom Bedecarre, AKQA, helps companies use digital media, focus on global brands. Richard Barker, Kitmondo is a classified lead generation business, gather classified ads primarily from B2B and distribute to B2b Web sites. Classifieds don't work oftentimes in B2B publications, most are rather empty? Most pubs were charging in advance, unattractive to advertisers more and more aware of performance related advertisers. Packaging verticals, provide it as ready-made content for publishers, monetize with cost-per-lead. International business, sell worldwide. Dave Hills of LookSmart, an ad network/search engine company, also a publisher in that they operate 180 vertical search engines (COMMENT: good to hear that they position search as publishing). Online will fragment, consumers are better with technology, though. Extremely noisy market, technology will meet consumer and find verticals that are very relevant to them. It's not a matter of if, just how. "Advertisers desperately want to talk to your audiences."


Ken: Are publishers getting a fair share of the $12-13 billion on the table?

Dave: Adoption rates of audiences are far faster than those of advertisers, see it in migration of ads to cable from broadcast TV. During the transition from one media to another, everyone's learning how to assimilate. Medium starts to gain, flattens out, as it flattens advertisers say gee, now I understand this medium, then they start putting money into it. Brett: J&J move mentioned by Ken is huge, a big statement not to attend TV spend meeting. Tom: Brilliant time to be a publisher, in UK people spend more time in front of a browser than TV, yet in US spend is 10X larger on TV than online. Spending billions where customers are not. Richard: From a Lo-fi perspective (classifieds), a voice of concern. How much effort do online publishers make to get in a dialog for their users. Not a market to rest on your laurels. On lead generation market built about understanding what your market wants and when they want it. How often do they gather data that may make a difference for their markets. Publishers have to work hard for advertisers. Don't leave money on table. Technology allows Richard to get closer to buyers/users.

Ken: What do we need to be proactive about? Dave: Infrastructure is in place, AdSense is there, etc., cobble together the best yield. Look at yield per thousand pages. Take advantage today, could be all self-serve today. If you have a highly finite and targeted audience, make a few sales calls. You want to own some of those passively acquired advertisers, make sure that you can work them up into more high-value campaigns. Figure out where you want to penetrate the market based on cost of sales. When ad technology and publishing technology and mindset come together, the lag goes away. Brett: Hard to get high CPM out of brands, better to be high in a small niche than low in a big niche.

Question: Have any verticals surprised you? Brett: Companies are lean and mean, less staff haggling about deals, Adknowledge uses pre-paid advertisers, no bad debt, only way the system can work. Dave: Don't disclose specific verticals, mom and pop search do better than finance channel, seem to be more female than male skewing, reasonably pleased with position. Broader point from a publisher perspective, you need to dominate your position wherever you are. Also relevant to have a different take on something, if you have a vibrant audience and tends to be a little bit different, you'll get a nibble. Against that, are you large enough to be relevant to a broad base of advertisers. After dot-com flu, had to make company smaller, then had to focus on being large enough to be relevant to an advertiser. If they can't afford to buy it reasonably, a problem. Maybe not a number one or number two position, but large enough to keep down cost of sales.

Question: Return on investment for advertisers. What is a good value. Tom: People are pushing lead generation dollars online, next major thing is how editorial content is compatible with brand, many brand advertisers afraid of MySpace, radioactive purchase right now. Editorial quality and CPM are key metrics. Dave: One model won't dominate. The more control the advertiser wants over placements the more that they should pay a premium. CPM banner advertising sticks for control-oriented advertisers, etc. Over 10,000 advertisers up and live and running at any point, but they have a lot of control over them. All the way down to publishers who know much more about audience than advertisers such as B2B market, conversions will cost more. Richard: Principally a lead generation platform, 10 percent of advertisers provide 90 percent of revenue, keen on conversions, becomes a relationship matter, work with the ten percent.

Question: Google, Yahoo experimenting with subscription/premium content, will they be more open to online model. Dave: Large portal will become less differentiated, like Cold War rhetoric. Underlying it is problems of complexity. If you need more information from the user to give them value, where's the service's value. Need easy to use infrastructure so that the advertisers as well as users appreciate the service, make it easy for them to find the eyeballs. Large advertisers can't leverage their position as well, they will always pay for a highly targeted audience with high ROI. Large portals become more insular with what they can afford to do with publishers.

Question from CQ: Selling access to people wanting to influence Congress. We're online because that's where the users are, we print because that's where the advertisers are. Selling very high CPMs, much higher in print, $50 vs. $1,500. Will advertisers become comfortable with moving up. Dave: Already seeing that, need to focus on more on print versus online and recognize that it took a long time to get to where you are in print, be prepared to invest in online. Tom: Media buyers can be lazy, easy to plug in metrics, but looking for additional places to invest takes effort, takes sales calls.

Ken: Are prices going up? Brett: Yes, but inventory is growing as well, more technologies available to optimize inventory, slows the growth. Higher CPM dollars growing somewhat more quickly.

Brett: We bet that we can get more for the clicks, believe in underlying technology.

Question: Impact of social media? Tom: Publishers don't want to come down from the mountain, some want people want to put up user content, but many are leery. Brett: Burger King deal with heavy.com, gave burger king crowns to people generating their own ads. 24 months ago never would have taken it on. Brands have to, brands forced to unleash brand and let users do what they want with it. Richard: B2B learning from users, motivations are different for contributions in B2B, different motivation. Giving them authoring rights, let them have an attachment to the content. Give a little, get a lot. Dave: Definition of user-generated content changing, user generated content that's a by-product of their own special interest. Social networking is not given just to large sites, small sites can do it, trying to get furl to grow, user-generated content doesn't have to be a huge original idea, learning about how to serve your audience better.

Ken: Free Craigslist, how do we deal with that? Richard: Craigslist is still narrowly focused, leaves a lot of scope for everyone else. Categories will remain the same on Craigslist.

Great panel, great insights - and some of the greatest opportunity for growth in publishing. Keep your eye on the audience as a contextualizer, not necessarily in the context of "social media" buzzworthy stuff but a lot of more basic things.