NEW YORK: The online advertising industry in the US must respond to the "transformational uncertainty" facing media companies and brand owners if the web is to increase its share of revenues.
The IAB, the trade body, partnered with Accenture, the consultancy, to try and assess the future evolution of internet advertising.
According to their report, online adspend will fall by 1% in the US in 2010 to $22.3bn (€18.3bn; £15.2bn), leaving it below the record high of $23.4bn registered in 2008 but ahead of the figure of $2.1bn posted in 2007.
This trend is unlikely to last in the long term, as consumers now dedicate more time to the internet than watching TV, with these two channels taking over 60% of total media usage between them.
Despite this, TV currently receives nearly 40% of ad budgets, compared with just 10% for the net, a gap that will only be closed if the web develops in a way that will attract brands to this medium.
At present, there is no concentration on the demand-side, as the interest shown by major firms like General Motors, Coca-Cola and Bank of America is diluted by the activity of thousands of other brands.
Among agencies, the primacy of holding groups like WPP and Omnicom has proved beneficial when it comes to coordination, but further work is needed to secure accurate data proving ROI.
In terms of supply, Google, Yahoo, AOL and Microsoft dominate, but inventory is spread across a hugely diverse range of services from social networks to news portals.
Looking ahead, one possible scenario is an "all for one, but not one for all" arrangement, whereby content ownership and the buying and selling of advertising remain "highly distributed".
This would allow small firms to exploit the low cost of entry and rapidly create new media brands which attract considerable traffic, undermining the construction of standardised metrics and ad formats.
Alternatively, the advent of several "big islands", where established enterprises buy up their smaller rivals, could lead to a simplified means through which to access content and purchase advertising.
However, such a process threatens to undermine the position of ad networks by centralising media buys, and may discourage brands from going online by limiting the options available.
A third possibility is the development of a number of "chain gangs" of content providers linked solely by their "common profile recognition".
While such a system might be less complicated than the first model, it may hamper moves towards sophisticated metrics and behavioural advertising as consumer data would be widely dispersed.
The final outcome, "everybody knows your name", is an ideal of a consolidated media environment, but without an effective monopoly among a select few operators.
This would allow for a universal measurement currency to be established and thus attract big advertisers, while ad networks could serve smaller firms.
Overall, the IAB/Accenture report predicted content creation and ownership will stay "largely distributed", although several prominent players are likely to display "market leadership".
By contrast, buying advertising is set to be "largely consolidated", with exchanges playing a key role and a range of regularised metrics coming into use.
Further factors likely to have an influence include pressure on advertising pricing, which will require new methods for monetising content and providing a "brand experience" on the web.
Mobile devices are also important, with the interactivity of devices such as Apple's iPad due to be a "game-changer for the industry".
Data sourced from Accenture; additional content by Warc staff