Predictions from Internet Week New York on where display advertising is headed and how digital marketers can fix display's problems.
We hover on the cusp of a display ad revolution. For years, banners have been performing a strange, strained dance: even as they become more interactive and memorable, click-through rates (CTRs) decrease. And although media buyers will spend over $7 billion on banner ads this year, it's social media that gets the lion's share of the press.
That's all about to change. Ask Neal Mohan, VP of display advertising for Google. He's among one of many speakers at last week's Internet Week New York who is convinced that display advertising is poised for incredible growth – and an incredible transformation.
In his keynote speech at the Interactive Advertising Bureau (IAB) Innovation Days @ Internet Week, Mohan made six predictions for how display advertising will "change for the better by 2015." They paint an idyllic picture of how digital marketers can fix some of the problems that have been plaguing display for over a decade. They're also consistent with what we're already seeing in the works. It isn't just Google that's driving these trends, but brands, publishers, the IAB, and the industry as a whole. Here are a few of Mohan's most noteworthy predictions, and why his forecasts could come to fruition.
Fewer Ads, Better Ads
It may be an outmoded sentiment, and it may apply primarily to an older audience with a narrow view of the current online space, but many consumers still believe that banner ads are omnipresent and annoying. It's a deep-seated and troublesome legacy that has endured, shaping investment decisions and hindering industry growth.
According to Mohan, the solution to too many online ads is, quite simply, to deliver fewer impressions. He predicts that consumers will receive 25 percent fewer impressions per person, but that the ads users do receive will be "better." Improvements will be made not just to the quantity of ads but the quality of the formats and their distribution.
Instead of throwing messages at consumers to see what will stick, ads will be more targeted. They could be based on real-time data from both publishers and data aggregators that can be used to ensure ads are timely and relevant. We're already seeing this evolve from the ongoing "data dilemma" and companies like BlueKai. As targeting becomes more sophisticated, the perceived need for massive quantities of impressions will decrease.
The IAB's new Rising Star ad units – the result of an industry-wide competition to create better ad formats – are also bound to play a part. With larger, richer, more functional units, a single ad goes a long way.
Beyond Click-Through Rates
Also expected to make ads more effective is altering the way in which they're measured. Mohan predicts that instead of measuring clicks and conversions alone, digital marketers will be paying more attention to metrics like emotional engagement and impact on offline behavior, with 35 percent of campaigns using these as their primary measurements. Even with search, social media, and mobile playing a major part in many campaigns, brands are still inclined to measure ad success by CTRs. An ad products director at a major online publisher recently told me that his team still encounters resistance from media buyers when it comes to incorporating valuable – but less traditional – metrics into campaign reports. This kind of bias can prevent us from getting a more complete picture of our campaigns.
Fortunately, we're being encouraged to broaden our horizons. Already companies like Moat are inviting marketers to measure online ad effectiveness based on mouse movements rather than clicks. If Mohan is right, new technologies have more in store.
Consumers Will Finally Love Online Ads
Perhaps most surprising among Mohan's predictions is that over 40 percent of online Americans will one day name display as their favorite form of advertising. This will surely be due, at least in part, to Mohan's other predictions, most of which benefit consumers as much as advertisers. When site pages are no longer overrun with banners and ads are more targeted and relevant to users, consumers will reward brands by being more engaged with their ads. And at the end of the day – and the end of the campaign – isn't that what we all want most?
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Tessa Wegert is a business reporter and former media strategist specializing in digital. In addition to writing for ClickZ since 2002, she has contributed to such publications as USA Today, Marketing Magazine, Mashable, and The Globe and Mail. Tessa manages marketing and communications for Enlighten, one of the first full-service digital marketing strategy agencies servicing such brands as Bioré, Food Network, illy, and Hunter Douglas. She has been working in online media since 1999.
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