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Display Ad Market Bigger Than Search? It’s A Matter Of When, Not If …

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Synopsis – There’s a lot of research available suggesting that online display advertising is set to make tremendous strides forward in the next five years, mostly due to technological advances that have reduced the cost of creative and placements for display advertising. With customizable templates, even a small business can put together materials for a display ad, and the ability to make quick modifications enables the use of testing to finetune campaigns.

In his article, “Display Ad Market Bigger Than Search? It’s A Matter Of When, Not If,” Aaron Finn discusses this situation, exploring the strengths and weaknesses of display as compared to search. He continues with a number of tips for launching display ads, making a great argument for investigating the display ad market now to see if it is an option you can exploit under these new circumstances.

The complete article follows …


Display Ad Market Bigger Than Search? It’s A Matter Of When, Not If

Market trends indicate that online display advertising has the potential to eclipse search advertising in the next five years, roughly 50,000 advertisers, currently lags far behind search, a $10 billion industry with nearly 1.5 million advertisers.

Why is search so prevalent? It’s simple — search requires zero investment in design creative and offers advertisers predictable results, straightforward targeting, and clear metrics that demonstrate return on advertising spend (ROAS). Online self-serve options together with real-time bidding systems have further helped speed market adoption.

With these benefits, search has become an advertising mainstay — and rightly so, since without clear metrics, you can’t justify advertising spend. However, new technologies promise a bright future for online display advertising. While some believe there may not be much room left for growth in the search world, there is tremendous opportunity for display to continue its expansion and adoption.

The Rise Of Display

The primary reason that search advertising has significantly outpaced display in the past is easy to understand. While creating a search ad has always been affordable and easy (through services such as Google AdWords or Yahoo! Search), display ad services have posed more obstacles for marketers, from huge design costs to complex campaign management.

Consequently, display historically was reserved for big businesses with big advertising budgets capable of accommodating high creative fees and expensive publisher placements. However, new advances in technology that greatly reduce creative costs and simplify campaign management have made the many benefits of display available to more businesses. Furthermore, these new technologies offer advertisers many of the same benefits as search — clear metrics, predictable results, and straightforward targeting.

Creative Made Easy

Businesses have avoided display ads in the past due to their cost and complexity, with banner ads requiring significant creative resources to produce. Additionally, testing and optimizing creative content across different banner sizes has been a lengthy process, prolonging the campaign launch.

Advances in display ad technology have essentially eliminated these obstacles, especially for smaller advertisers. These advances have also given larger companies and agencies the ability to build and test creative quickly and cost-effectively. Similar to a search campaign, a marketer can now launch a display campaign in a single afternoon, including creating a customized ad, placing it on target websites, and pinpointing specific c customers. Customizable creative templates, drop-down menus, pre-fill options, and other features help even novice online marketers quickly ramp up. Here’s a screenshot illustrating how customizable templates can help advertisers rapidly build display ads.

Effective Targeting

Since creating and launching display ads now can be straightforward, advertisers can devote more time and attention to display’s powerful targeting techniques. By adjusting targeting controls based on site, demographic, behavior, and more, advertisers can test various approaches and optimize their results. Today, display ad services can even run micro-targeted campaigns tailored to very specific audiences, even within a zip code.

Because display ad services report on nearly every attribute and dimension of an online campaign, advertisers are empowered to zero in on the most effective targeting techniques, spending budget as effectively as possible.

The Alaska Airlines display ad program is a good example. Their team created more than 175 unique ad themes, each in multiple sizes and formats, totaling more than 2,400 unique ad files. The ads varied to reflect different local targets, web audiences, and messaging tests — all managed through a central account. Comprehensive dashboard reporting allowed the team to monitor campaign effectiveness and optimize every advertising dollar spent. The airline targeted more than 20 different local markets with specific and customized promotions and tested 126 different campaigns to identify the optimal combinations of messaging for each market. As a result, the airline increased ROI by 125 percent.

Optimizing Campaign Impact

One of the most compelling benefits online display advertising offers is the ability to modify ads in realtime to meet new requirements and optimize results. Unlike a static direct mailer, which is gone for good once it has mailed, adjustments to digital marketing pieces can test new messages, images, calls to action, etc. Not only can offer and design changes take place quickly and easily, but performance dashboards breaking down results into easy-to-understand figures make it easy to get the information needed to signal where changes should be made. An advertiser simply monitors their campaigns, identifies and supports top performers, and discontinues weaker campaigns.

Display Vs. Search — Strengths And Weaknesses

At this point, most analysts believe that search will remain a marketing juggernaut for years to come. For example, Forrester Research (July 2009 Five-Year Interactive Marketing Forecast Report) says that US interactive marketing spend is projected to reach $55 billion by 2014, making up 21 percent of all marketing spending. Search marketing will lead the way, totaling $31.5 billion by 2014, followed by display advertising at $16.9 billion. Given these kinds of projections, how would it be possible for display to overtake search? Developments in two key areas could work together to launch display into the forefront.

1. Cost

Search can get expensive, especially if you want a hot keyword. The most popular search term of 2009 — “mesothelioma” — fetches a whopping $99 per click, and the price is only going up as advertisers race to secure limited search ad space. To put it simply, the search market is saturated. This drives costs up and the overall effectiveness for the mass market decreases. Search marketers even have unspent search budget at times, unable to spend all they would like to on keywords with some promise of profit. Display offers a great opportunity to spend that budget. And, believe it or not, some display advertisers are already spending more on display than search (anywhere from twice to ten times as much).

2. Market Size

Great opportunity for growth exists in the display market that simply doesn’t in the search market. Consider the limited real estate for search — there are only a handful of popular search engines, while for display, there are millions of websites. Your competitors are already leveraging search marketing, just as you are. Many of them, however, are not implementing display campaigns, leaving open opportunities for expansion of marketing programs. In addition, the display market can scale with growth, whereas the search market cannot. There are only so many popular keywords to compete for, while display does not face these same kinds of limitations.

Launching Display Ads

Mixing and matching ad media is a proven approach to driving leads and sales, and the rapidly changing ad landscape is ripe with opportunity for businesses of all sizes. Finding the right mix of search and display will require trial and error, but advertisers should be aggressive and innovative in their strategies. They should no longer hold back due to the traditional view of the expense and commitment needed for display. By taking full advantage of one of the online display ad services available today, a smaller business can explore the world of display advertising and find that the level of commitment and cost may be lower than expected.

Advertisers can immediately integrate display advertising into their marketing plans with one of the new, easy-to-use ad services, consisting of creative template libraries with a wide variety of options that to customize with color, font, images, and more. These templates greatly simplify the creative process, eliminating the costly endeavor of designing and creating a banner ad from scratch.

Advertisers can then choose their audience using basic targeting to select from a variety of placement options, specify the URL customers will be led to, the types of sites where the ad will appear, etc. The advertiser chooses the type of audience, where the ad will run (city and state), and how to distribute the budget. Advertisers can develop a list of keywords, set the timeframe and budget, and divvy up money between various network and advertising exchanges.

Sounds easy, right? In fact, a lot of it is the same or similar to how you build and put a search text ad in place. And, like a search ad, once the display ad campaign is ready, all that’s left is to optimize results as you go. Once the campaign launches, advertisers can review reports that show the number of impressions, clicks, and more. While the campaign is active, advertisers can make changes on the fl y — continuously improving ROI. Auto-optimization features can even suggest adjustments.

The online advertising market is going to grow dramatically as advanced display ad platforms emerge, continue to evolve and demonstrate the ability to deliver successful ROAS. Search engines are even offering self-serve platforms — Google AdWords has a basic Display Ad Builder for placements on the Content Network, Yahoo sells MyDisplayAds, while AOL entered the market in mid-April with its Ad Desk product, offering self-service display ad capability on the Advertise.com network. Down the line, many people might be surprised at just how big a piece of the pie display ends up getting.

Online marketers should not ignore display, they should embrace it. Not only can it produce results on its own, it can greatly enhance an overall online marketing campaign. Don’t wait until display has become as big as search to jump on board. Take advantage of it now and reap the benefits, while your competitors are still lagging behind.

About the Author

Aaron Finn is co-founder, chairman, and chief strategy officer of AdReady. Headquartered in Seattle, AdReady (www.adready.com) is an innovative advertising technology company with a unique approach that helps businesses of all sizes build powerful online display campaigns based on proven creative and media plans. Aaron began his career in the commercial banking industry and holds a B.A. in Business from the University of Iowa.

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