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The future of online display - A tipping Point?

Posted by Osman Bangura, onApril 23, 2010 at 09:48 AM PDT

Is the banner dead? Think again! If you are denying the tipping point of display, I will say, think deeper. It

is the rebirth of display. It’s evolving; with an integrated approach in an industry where the essence of

DATA can no longer be ignored. Online display ads play a bigger role in every marketing mix.

In the last 2 years, the interactive advertising industry witnessed a number of changes, which for some players led to

serious decline in ad revenue and for others the formation of a new landscape that will play a significant role in

changing the way business is done in online advertising; namely: the importance of data and the role of online

audience in digital advertising. Faced by one of the worst recessions and economic downturn since the “Great

Depression”, advertising budgets declined dramatically. Advertisers chose for more measurable formats with

prospects to increase their overall ROI in advertising. The shift from traditional media to online fueled some amount

of growth in online advertising despite the crisis. Search maintain its position as the largest online advertising format

by revenue, accounting for nearly 50% of total online ad budgets in many major online ad markets.

Not long ago, the future of online display ads was questioned. It became the topic of discussion in many panels,

spawning discussion in the industry regarding its potential to rise again. However, the integration of display ads with

search advertising and the emergence of high end technologies for rich media, online video, mobile and social media

platforms opened up new opportunities, and are set to give online display ads a new life and help create even larger

revenue streams for publishers, networks, agencies, and better ROI for advertisers.

Is Banner advertising really dead? How effective are banner ads? Is this the Come Back of banner ads?

Many questions have been raised and many comments have been made regarding the future of display since search

continued to grab larger portions of online ad budgets while display ad revenues continued to shrink. From a logical

perspective and empirical evidence, I will call it the modernization of online display advertising. In spite of the

challenges, I consider every trend in the online industry as an opportunity. In one of my recent articles about the

rise of Exchanges and DSPS’s, I also called for the adaptation of current business models in online media trading,

especially from the buying side; based on the opportunities and challenges in the industry. The role of online display

will definitely get bigger as it is essential to the success of every online marketing mix.

In terms of ad revenues, the last 2 years were probably not a favorite period for the banner. If you still doubt the

potential of display ad revenues to revamp then you are probably still considering display ads as static gifs, images,

or text links, etc. Still living in the 90’s?

In a recent European survey[i] (#_edn1) by ComScore, visitors who viewed a display ad were 72% more likely to

visit an advertiser’s website and 94% more likely to conduct a search activity on the advertiser’s brand than those

who saw no ads. In terms of branding and reach, display ads have a greater reach than search. However they both

need each other, as search engine can boost the effectiveness of display ads, and vice versa. Display ads increase

awareness of a brand, which can drive direct traffic to an advertiser’s website and increase the likelihood of

purchasing a product or service. Certainly, when combined with display, more search activity is conducted and

website traffic increases.

Why should the effectiveness of display ads in clicks and conversation be questioned? Advertisers should be

focusing on originality, being more creative and conversational with their display campaigns, presence in the right

channels, at the right time, engaging audiences based on pre-knowledge about their characteristics, and applying

an integrated and measurable marketing approach that works best for them.

How integration can fuel growth in online display.

iMedia Connection Blog http://blogs.imediaconnection.com/printBlog.aspx?BlogID=1330

1 of 2 4/25/2010 9:55 PM

In the interactive advertising industry, evolving trends are perceived by some stakeholders as opportunities, while

others with a vulnerable position may consider trends as challenges or threats. Simply, whether you are an

advertiser, publisher, network, or agency; the rise of new channels and platforms means an increment to the

industry’s existing opportunities; as new streams of revenue will be created. Your final share of the industry’s

revenue will depend on the extent to which you embrace and integrate these newly evolving technologies. It doesn’t

require foregoing one form of advertising for another. Retargeting with search and display campaigns can

significantly increase conversion rates and hence reduce the percentage of wasted or non-converting clicks.

Advertisers spend time in optimizing their search campaigns that too often; end up delivering higher CTR and low

conversion rates due to the absence of or lack of efficient re-targeting. With the integration of display in search

campaigns, an advertiser can gain better insight about a visitor’s interest, thereby contributing in the efficient

allocation of display ad budgets. Be it banner ads, rich media, widgets, search, or videos, etc. All that is required is

a hybrid marketing approach in which all these forms can easily be incorporated. This will improve overall ROI and

your share in the industry’s total revenue pie.

In capitalizing on opportunities and facing the challenges resulting from the current trends in the online media

landscape, underestimating the potential of one of the channels due to preference for the other will be a mistake. If

you are not getting enough conversion on your display campaigns, there could be many reasons for that. The

technology, and the most effective technique for designing and creating more dynamic ads that could be served in

Real Time and measured in CrossPlatform is already out there. Make use of it.

A week ago, I attended a monthly online advertising event in Amsterdam called “Online Tuesday”, an event that

brings together online professionals from across the Netherlands; organized by DQ&A (http://www.dqatraffic.com/)

and partners. The topic of discussion was “The future of Online Display Advertising”. The keynote was Damian

Lawlor, Managing Director Google Media Platforms Europe. His presentation was followed by a panel discussion

that featured renowned European marketers from the Netherlands. The audience wanted answers regarding trends

and technological challenges in taking advantage of opportunities in display advertising. In discussing the road ahead,

Damian, said that “online display will grow faster than search”,a statement that was met with a number of responses

from the panel and audience. After a broad discussion and a number of questions from the moderator and the

audience, it was interesting to see how the entire panel ended up agreeing with the online giant, Google, on the

notion that: “online display will grow faster than search”. From the audience, a marketer from the largest Dutch

advertiser in terms of investment, also highlighted the opportunities in online and said his company “will invest in Ad

Exchanges”.

A data driven industry

The data is in your hands. Understand it. In the current online marketing ecosystem, acquiring data and capitalizing

on it is the key. There is so much data out there that could have significant impact on overall ROI in marketing spend

for the demand side. Data is the key to success when you know where to get it, how and what to do with it. At the

end of the day, it all comes down to data, which is already playing, and will continue to play the most important role

in online advertising.

What will advertisers need? An integrated online advertising strategy with an audience-centric focus model

in which, acquiring and sharing relevant data is efficiently applied.

[i] (#_ednref1) Source: Whither the Click? ComScore Releases European Study Highlighting the View-Through

Impact of Online Display Advertising.

iMedia Connection Blog http://blogs.imediaconnection.com/printBlog.aspx?BlogID=1330

2 of 2 4/25/2010 9:55 PM