CIM MBA Program

Friday, June 12, 2009

Shift Coming in Digital Ads, But How Will it Impact the AEC Industry

At a recent Advertising 2.0 Conference in New York, Barry Diller, chairman of IAC/InterActive Corp. suggested that the next frontier of internet ads is coming as web content and internet ads are set to change. According to an article on BtoBOnline.com, Diller said that the current ad formats are obsolete and Internet users have come to ignore ad in their "commoditized" state. I agree that we are on the verge of the "next thing" in internet ads. Overall, branded experiences and sponsorships are clearly more effective. For the most part, AEC web advertising is dominated by material and equipment suppliers. Not many contractors, engineers, or architects have extensive web campaigns. Which I see as a tremendous opportunity. The bar is not high, and it is easy to see easily a well planned and executed campaign could easily have an impact.

In addition, Diller believes that more publishers will be moving to a paid content model. My belief is that most publishers will struggle to move to such a model. For this shift to occur, there must be compelling content. So much content is simply regurgitated and linked from site to site. The drop in advertising revenue for publishers has resulted in reductions in editorial staff. This in turn has resulted in less original content. Publishers have struggled to find ways to make publishing their content profitable.

How does this relate to the AEC industry? For the most part, the publishing models in the AEC industry are pretty stale. Other than assets like McGraw Hill's construction.com and ENR.com, the AEC news sites are fairly fragmented. In addition, construction.com and ENR.com have so much content, it is challenging for them to deliver a good experience. On their ENR.com site, the news and content is fairly stale. Feature stories are only updated once a week. They've recently tried to leverage blogs and video content. On the print side, ENR has lost its position as the bible for the construction industry. The page count is only a fraction of what it once was. McGraw Hill is rumored to be considering divesting of its non-core assets so it can focus on its text book and financial services business. As traditional publishers struggle with both their print and on-line assets, advertisers are going to look other options such as paid searches and social media. In the AEC industry, publishers have a long way to go before visitors are willing to pay for content.