“We are Undergoing the Greatest Media Transformation in History”

My headline is a quote from Mary Meeker’s “Economy + Internet Trends” presentation published just last week:

Here are a few of my favorite slides:

Advertisers are willing to pay more for behavioral targeting because behavioral data dramatically increases targeting precision and results in higher campaign response rates.  Reach and inventory quality are no longer sufficient differentiators for online advertising – increased targeting precision is the new competitive frontier. The recent survey data in the pie chart above highlights this trend and helps explain why the the most innovative firms in the industry continue to invest in the terabyte-scale data analysis that enables behavioral targeting. Here’s an example of one such investment:

And finally, here’s a compelling slide illustrating one of the reasons we will continue to see tremendous growth in Internet and mobile advertising:

The bottom line is that advertisers pay to capture the attention of their target audiences, and that attention is fragmenting across new Internet-enabled channels. Media time spent versus ad spend are out of whack because these new digital channels are emerging so quickly that advertisers can’t effectively keep up. Rest assured that advertisers will keep investing their budgets to follow consumer attention – wherever it’s focused.

As you might guess, I disagree strongly with Eric Clemmons’ recent argument that internet advertising will fail, and commented on the flaws in his argument on Daniel Tunkelang’s excellent blog, The Noisy Channel. Advertisers’ huge and growing investment in internet advertising gives technologist ample incentive to innovate and address the challenges in increasing its effectiveness.

Any thoughts on where the biggest hurdles lie?