In a recent post we looked at how digital ad spend will shape up over the next five years. According to Forrester Research, display advertising is one of the most digitally promising channels. By 2016, Forrester Research says that display advertising will own 37% of the online advertising market share and that it will be worth nigh on $28 billion.
This is borne out by statements made by Google’s Eric Schmidt in June this year. “We started off with largely text ads, and now we have this display business which is going to end up being a $10 billion, $20 billion kind of business,” said Schmidt.
At the moment, Facebook benefits most from display advertising, followed by Yahoo and then only Google.
Josh Shatkin-Margolis, founder and CEO of Magnetic, is also singing the praises of display advertising. He was cited in a Search Engine Land article written by Josh Dreller, in which Dreller sought to find out whether display advertising really is about to soar.
Shatkin-Margolis believes that not only will display advertising become the most dominant avenue for digital advertising, but it will also change the value of search and make retargeting something of a priority.
Dreller cites Shatkin-Margolis: “Soon, not doing search retargeting will be a fireable offense for an advertising agency.”
As proof, Dreller uses the Forrester Research report, which shows that display advertising will just about triple over the next five years, while search, which is currently the most dominant means of digital advertising, will not even double.
He also points to the huge number of impressions that display ads generate, and the retargeting potential using highly targeted keywords.
Cameron Jonsson also wrote an article on Search Engine Land extolling the virtues of display advertising.
He cites a study by emarkter, which looked at the percentage of advertising revenue generated by display ads for the big players online.
As mentioned above, Facebook leads the way. Facebooks’ display ad revenue will grow from 7% in 2009 to a projected 19.4% in 2012. Yahoo’s display ad revenue will drop from 15.8% in 2009 to a projected 12.5% in 2012. Google’s display ad revenue will grow from a very paltry 4.5% in 2009 to a much improved projection of 12.3% in 2012.
Google’s growth is in keeping with Eric Schmidt’s statement regarding the company’s new focus on display advertising. Neal Mohan, vice president of display advertising at Google, said, “It’s now clear that investments in new technologies, new ad formats and improved buying and selling processes are helping to grow the display advertising pie. This benefits publishers who make more money from display ads, users who receive free ad-funded content and marketers who are able to grow their businesses online.”
All of which goes to show that search and display advertising will go hand-in-hand in the future and SEOs that ignore the correlation are likely to be caught with their pants around their ankles, flushing away conversion opportunities.
(Image by xJasonRogersx, CC by 2.0, via Flickr)