Banner ads are finally on their way out, surprisingly killed by Rupert Murdoch and the spammers he bought out.

The Financial Times ran a piece today describing fears that social networks are slowing the growth of online advertising in the UK.

The slowdown is attributed to an inability to figure out how best to advertise on social networks. This challenge includes both the mode of advertising (after almost 15 years, we're finally realizing that users don't dig banner ads) and techniques for targeting ads:

Networking audiences also tend to spread thinly over many different website areas and focus on their own content, such as blogs or homepages.

That distinguishes them from portal audiences, which usually congregate in popular areas such as news, sport or entertainment channels, making them easier for advertisers to target.

As Internet content disaggregates from closed portals out to Widgets and feeds, we can't expect ESPN to tell us what their members want – their membrs are all on Facebook these days.

This is going to mean some exciting changes in online advertising:

1. Contextual ad engines like AdSense will have to get smarter about presenting ads on sites like Facebook, which are increasingly serving as online applications rather than content portals.
2. Expect continued innovation in efforts to advertise syndicated content, from Feedburner feeds or Clearspring Widgets.
3. Watch ads move from a content environment (banners on articles) to an application environment (sponsored profile themes on MySpace).
4. I expect marketing communications move from a broadcast/push mentality to a permission-based approach.

Banner ads were big, ugly billboards on the information superhighway. You drove by, they tried to make you look. As content disaggregation proceeds, more and more users will stay "home," spending more time with their RSS readers and Facebook apps to aggregate content and applications in a single place. Getting a marketing message someone's home requires a certain amount of ingenuity and appropriateness, both of which are good for people who already have a U. of Phoenix degree.

These changes may not happen today or this year. UK advertisers they still expect growth, just slower growth – roughly 30% per year instead of the 48% reported in 2006 – and it still far outpaces offline ad growth. But the trend is obvious: the old model isn't useful in the new world of hypersyndication and social media.