According to the to Interactive Advertising Bureau, total online ad revenue reached $9.26 billion in the third quarter of 2012, which is up six percent from the previous quarter and 18 percent from Q3 figure of $7.8 billion a year ago.

The CEO of IAB, Randall Rothenberg, said the growth is due to marketers recognizing digital media’s capacity for engagement and interaction. He cited social media and mobile on-the-go marketing as examples.

Here’s the IAB’s chart of online ad growth in recent years:

The upshot for publishers is that, while the mobile monetization riddle has not been solved, the growing amount of dollars flowing into the digital space is likely to produce solutions soon.

IAB compiles the numbers based on a revenue survey of web sites, commercial online services, free email providers and all other companies selling online advertising.

Sure, I followed developments from the sidelines, religiously reading paidContent, GigaOM and following Jason Hirschhorn’s curated feed, Media ReDEFined. But there have been many Rip van Winkle moments when I can hardly recognize the landscape. Agency trading desks, RTB, DSPs, SSPs, last-click attribution, third-party data, DMPs, retargeting … there is a pea soup of acronyms and lingo to learn, not to mention entire new categories of technologies and players in the new value chain of online advertising, and then there’s mobile, video and social, too! (This video from the Internet Advertising Bureau, U.K. gives a good summary of what happened, as does this one from MediaMath and Improve Digital.)

The ability to precisely target users and immediately measure response rates has resulted in the programmatic buying and selling of online display inventory, not unlike that of financial commodities. This commoditization of online advertising would seem to be a sea change in the way things were.

And yet, and yet. Despite all the changes, a lot has stayed the same:

• The industry is still debating the value and effectiveness of banner ads. This was a debate in 2004, and it continues today. Banner ads are reviled in many quarters, but they’ve shown remarkable resilience.
• Nielsen and comScore are still the two main measurement agencies providing the currency on which display is bought and sold. Publishers continue to be dissatisfied with both, but new players, such as Quantcast, haven’t made much of a dent. This isn’t a big surprise. The market for third-party media measurement tends towards a duopoly or winner-take-all (Nielsen, Arbitron, ABCe).
• There are still discrepancies between agency and publisher ad servers. There are less discrepancies today than in 2004, but they’re still there. Low discrepancy is actually used as a selling point by ad servers now.
• Mobile is still the next big thing. To be fair, mobile went from nominal to $1.6 billion in 2011. But it can grow much, much bigger if a company can figure out the best way to monetize mobile attention. Banner ads on mobile sites aren’t it.
• The industry is still concentrated. The top 50 online ad sellers accounted for 94 percent of total revenues in 2004 compared to 90 percent last year. Many of the players are different this time around, but it continues to be about scale.
• Publishers and agencies are still doing dodgy things, whether it’s running fake pre-rolls or stealing publishers’ user data. The surprise here is that there hasn’t been more of an outcry against these practices.

I recently dug up Geoff Ramsey’s November 2004 eMarketer report, “The State of the Online Advertising Industry.” At that time, eMarketer was forecasting the U.S. online market to be $9.4 billion that year, up from $7.3 billion the previous year, and predicting torrid growth in the years ahead, reaching $17.5 billion in 2008. The factors driving such growth? The report listed the following reasons:

1. The consumer is in control

2. The Internet delivers on the corporate mandate for marketers to be more accountable

3. The economy continues to plug along with reasonable growth

4. Broadband is changing the consumer Internet landscape

5. The crack in the foundation of the $60 billion television industry is widening

6. Search continues to evolve and draw more dollars

7. With increasing numbers of Americans shopping and buying online, marketers have greater opportunities to reach consumers who are interested in a given category

Sound familiar? Those factors wouldn’t look out of place in any year in the past decade. I’ll highlight the most promising trends of the moment in a future post. For now, it’s no surprise that, notwithstanding the new tools and technologies at our disposal, publishers are still trying to maximize the value of their audiences while advertisers and agencies are trying to reach the right people with the right message in the most cost-effective way. The formats, tools and technologies may be different, as might the players involved, but clearly there are truisms that continue to hold, and we would be well-advised to remember them.

Oh, and the actual value of the U.S. online ad market in 2008? $23.4 billion, with last year clocking in at $31.7 billion. That’s torrid growth for sure. Actually, online advertising as a category is starting to become meaningless. It’s like measuring a paper-based advertising category made up of yellow pages, newspapers, magazines and other pulp-driven formats. But somehow, I suspect we’ll still be measuring the growth of online ads in 2020.

Rags Gupta is managing director at RollUp Media, a publishing startup based in London. He is also on the board of Videoplaza. Previously, Gupta was part of the founding executive team at Brightcove. He started his career in digital media at Live365.

Image courtesy of Flickr user Abode of Chaos.

In either case, the phantom ads amount to a frightful waste for ad buyers and a problem for publishers who still face skepticism about the efficacy of online ads.

A New Era of Online Ads

Now, new ad technology is promising to eliminate ghost ads while also giving publishers new tools to assign premium or bargain prices to ads on different parts of a webpage.

Both comScore and SAY Media say they’ve solved the phantom ad menace with kits that let advertisers use dashboards to confirm the ads they buy are seen and not just served.

“Advertisers will know what’s rendered and what’s not,” says Matt Sanchez of SAY Media, whose partner sites include popular tech destinations like TechDirt and ReadWriteWeb. He says the technology produces click through rates three to four times higher than the industry standard.

The upshot of the new ad metrics should be a drop in overall ad inventory and an increase in CPM (cost per thousand impressions) because advertisers can now have more confidence about about what they’re buying.

The new tools, which both companies have unveiled in the last few weeks, may also juice the market for ads based on views alone.

According to Forbes’ Chief Insight Officer, Bruce Rogers, many brands responded to the financial crisis by retrenching to ads based on “transactional activities” — in other words, they’ll pay for ads that are clicked but not having their ads simply appear on a site.

Rogers hopes that Forbes’ decision to use comScore’s new tool, called “Validated Campaign Essentials,” will lead more ad buyers to build brand awareness by paying for pure impressions.

‘Gold below the Fold’

New ad verification techniques are likely to change not only ad buyers’ calculations but those of publishers as well.

According to Andrew Lipsman of comScore, content companies may be undervaluing some of their “below the fold” inventory. In practice, this means they’re selling down-the-page ads at a clearance even when those ads may be getting some of the best exposure on their site.

“There’s gold below the fold,” says Lipsman, who claims the new technology will allow publishers to identify and properly price their best ad space.

SAY Media’s Sanchez argues that the technology will also force publishers to remake their page layouts, and optimize their design to accommodate fewer and more effective ads.

“There’s too many ads on a page. It’s time to pull of the clutter.”

Build it — but will anyone come?

The new tools seem like a win-win for both ad buyers and publishers, and could end much of the black magic that many people associate with online ad buying.

But that doesn’t mean people will use them.

“For advertisers, this should be like ‘sound the flight of the angels.’ Who would say no? But I’ve been somewhat surprised that the impact and uptake wasn’t immediate,” said Forbes’ Bruce Rogers.

Rather than rushing to embrace the product, he says, the industry has so far responded with “inertia.”

Rogers thinks this is understandable given supply chains and entrenched habits. He hopes that the site of the new ad tracking dashboards will soon lead more advertisers to jump on board.

“It’s going to happen.”