Increasing changes in the advertising industry are a further sign of the Internet's growing maturation and the ripple effects caused by Google.

These two articles are an indication that the Internet is becoming an advertising channel in its own right that can compete admirably with the tried and true venues of print and television. Not only is the Internet where the kids are but it is also much more measurable than those other mediums. The data angle was Google's insight and it continues to shake things up, albeit at a slow, steady pace.

To face the changing demands of customers, advertising companies are having to justify prices with data not just reputation. As a result, more and more small firms are getting big contracts.

Trends for 2007

If this trend means fewer commercials on TV, I am all for it! That AMEX sponsored episode of West Wing was great - almost as good as watching PBS. On the other hand, if it means more websites with flashing, blinking, distracting ads... that will suck.

Madison Avenue Sifts Through 'Clutter'

Ad Trends Veer Toward Fewer TV Commercials, Greater Use of Internet

By BRIAN STEINBERG and SUZANNE VRANICA

January 3, 2007

Wall Street Journal

Consumers may see fewer commercials on television in 2007 -- but a greater variety of ads on the Internet. That's the outlook for Madison Avenue after a year of upheaval in the ad industry.

Many of these new outlets offer advertisers more data to track consumer response. That is prompting marketers to demand more evidence from older media on whether their clever commercials make a difference in buying decisions.

Fewer Ads: Network TV executives are beginning to realize that the dozens of ads and promotions that run during their most-watched programs don't create the best environment for getting a specific ad message across to consumers. Network TV runs an average of about 15 minutes of ads and promotions per hour, according to research from WPP Group's MindShare. Advertisers say research shows that running fewer ads -- reducing what they call the "clutter" -- would make it easier for viewers to remember the marketing message of those that do air.

New Yardsticks: Marketers will look for new ways of measuring the effectiveness of their ads. For decades, advertisers have decided where to buy space or time in part based on what they call "boxcar" numbers -- newspaper and magazine circulations and TV ratings. The trouble is that these figures tell Madison Avenue only the number of people who might have seen an ad, and do nothing to reveal whether any did see it -- and, if they did, whether they remembered anything about it or acted on it.

That is starting to change, as interactive media such as the Web offer advertisers data that track who saw their ads and how they responded. When it comes to traditional media, though, marketers are still looking for better data.

Some are calling for new ways to measure whether consumers pay attention to their ads. In 2006, Toyota Motor Corp. struck a deal with NBC that required the network to demonstrate that its viewers paid attention and could recall particular details about a TV show, such as its story line. Data from IAG Research, a New York company that measures viewers' response to TV programs, ads and product placements, were central to the deal. Look for more pressure from Madison Avenue for other traditional media outlets to agree to such demands and come up with data offering proof.

A quick look at five advertising up-and-comers: Modernista, Neo, Universal McCann, Draft FCB and Google.

Five to Watch: Firms Rethinking the Status Quo

Upheaval in Marketing Leads Agencies to Revamp Structures and Strategies

By SUZANNE VRANICA and BRIAN STEINBERG

December 27, 2006

Wall Street Journal

Madison Avenue is being repaved.

Facing unprecedented upheaval in the advertising and media industries, big ad holding companies and their agency units are rethinking how they're organized. Traditional agencies were built for a world in which glossy print ads and high-priced jazzy TV commercials were the dominant form of marketing. That's less the case nowadays, as marketers siphon off ad dollars from traditional media to spend on newfangled ad approaches such as word-of-mouth marketing, cellphone ads and viral marketing.

The result? Under pressure from marketers, agencies are starting to restructure operations by aligning their creative sides with less glamorous parts of their businesses such as marketing services -- which include direct mail and in-store advertising -- and media-buying and planning. Moreover, with just about everyone eager to increase the use of Web marketing, traditional agencies are quickly snapping up digital marketing firms or hiring experienced digital staffers.