I put together a post  here of some recent thoughts regarding the direction of online media, particularly direct response versus impression media. Cliffs notes is:

• online media is a true direct response media and is better at direct response than it is brand awareness
• brand awareness activities online need new creative sizes (less commoditization) and more creative exploration
• we need to maximize the value of all the traffic we do manage to attract by making sure sites are tuned to maximize conversion

We were just ranked #9! Link is here or read our blog post.

Given that ~30% of users access the internet from work, it looks like we still havent seen the sweeping productivity lift that pundits promised back in the gogo years, but we are on track. Go web, go!

Below is some interesting data about this work online activity:

The Crisis of Credit Visualized from Jonathan Jarvis on Vimeo.

This is a well thought out and designed explanation of why we are going through this craziness.

[youtube=http://www.youtube.com/watch?v=Pk7yqlTMvp8]

<a href=”http://video.msn.com/?mkt=en-GB&playlist=videoByUuids:uuids:a517b260-bb6b-48b9-87ac-8e2743a28ec5&showPlaylist=true&from=shared” mce_href=”http://video.msn.com/?mkt=en-GB&amp;playlist=videoByUuids:uuids:a517b260-bb6b-48b9-87ac-8e2743a28ec5&amp;showPlaylist=true&amp;from=shared” target=”_new” title=”Future Vision Montage”>Video: Future Vision Montage</a>

This is a really nicely produced piece MSFT did about what they believe the future will look like, conveniently including the use of  future software and haptic technologies.

What’s funny about this video is that all the UIs in the video imply that in the future, Microsoft will have had some pretty serious changes of thought about the emphasis on great design. I would venture a guess that most of the concept UIs in this piece were created by designers not engineers.

I look forward a future when good design has a more strategic role in burying complexity to make our lives mote productive.

Most people quietly agree that for Brand advertisers still focused on brand awareness and impressions, the networks are a fine place to buy “long tail” inventory. Its a cheaper place to buy and often times its easier to buy from the networks vs individual sites. However, while the movement to network buying helps advertisers and agencies, it kills publishers. Networks turn non-premium inventory into fungible goods. This obviously hurts pricing for these publishers.

Publishers have rushed to networks to sell out inventory so they can continue to keep the lights on (and further their reliance in the CPM model). The problem for publishers is that the CPM model wont work on the web any longer…its dated and there is no scarcity on the web to maintain pricing levels that publisher seek to keep. This sets off the need to eventually change up how these publishers get compensated for their ads.

Eventually these publishers will turn to performance based pricing (CPA, Revshare, CPL, PPC, etc). This will in turn hurt the relevance of the 300+ networks. Eventually, publishers will only use the networks for an even smaller percentage of ‘spot market’ remnant display inventory. There simply wont be enough inventory for all of these networks.

Further, as the remaining CPM products continue to be treated as fungible and less inventory exists for impression based pricing, networks will conslidate. Look to the more mature financial markets for what will happen. Once goods are fungible, better regulated and mature, the big networks (exchanges) get more powerful. Today we have two winners in ths country for equities, the NASD and the NYSE.

Eventually, I feel this will be the case for CPM based display ads. There will be one or two major networks for all CPM inventory that publishers dont want to price on a performance basis.

So who do you think the winners will be?

Here’s why:

The impression pricing model (CPMs) depends on scarcity (of channels, pages, broadcast spectrum). The internet destroys the CPM model assumptions as new content comes online each day, thus destroying scarcity in the CPM model. Inventory on the web is infinite, so non-premium inventory will price lower. While more content (ad inventory) comes online, attention remains FINITE. Any single blogger now competes with the likes of the NYT or WSJ. Performance pricing and direct response will in the end rule the web media buy.

Also, while this is occurring, publishers are self cannibalizing pricing by using ad networks that reduce their inventory to fungible goods.

The outlook seems bleak for the firms that depend on impression based pricing. Digg is a great example of how massive amounts of new inventory can hit the market quickly. Digg instantly competes with their dugg destination posts. Look for more moves like yesterday’s Yahoo’s APT accommodation of performance pricing and look for the other quality performance networks to realize more revenue.