Ad agencies are scrambling to evolve

Major companies from Nestle to Ford are increasing the proportion of their ad spend on the Internet to the detriment of traditional press ads and big ad agencies are scrambling to evolve.

The changes have given birth to a slew of tech start-ups trying to come up with more sophisticated ways to match ads to consumers, often with sophisticated data mining techniques and algorithms.

While traditional advertising groups jostled for awards at a recent annual industry gathering in Cannes, the year’s biggest star was a newcomer to the beaches: the social network Facebook.

The company has gone from nowhere a few years ago to become the biggest single seller of online display advertising in the United States with more than $2 billion in revenues this year, according to research firm eMarketer.

“If I have a good experience with a brand I’ll tell a person offline — I might tell my friend — but if I do it on Facebook the average person is telling 130 people,” said Facebook Chief Operating Officer Sheryl Sandberg.