A recent study by WPP’s GroupM states that:

Even as digital advertising increases by 7%, “the growth in Internet display advertising has lost momentum over the past several years as supply has run ahead of demand. In 2010, display spending is projected to have a smaller share of total digital spending, with a 34 percent share, down from 35 percent in 2009 and 39 percent in 2006.

Worldwide display advertising is expected to grow just 5 percent next year to about $20 billion. By contrast, global search advertising will soar 12 percent to approximately $25 billion.”

I don’t see this data as a death knoll for display advertising. Internet years are like dog years in that, display advertising or banner ads, as they were once called, are ancient compared to the “new” world of search. The first banner ad is estimated to have appeared in 1994 while search ads came on the scene in 2000, a whopping six years later just as the online banner market crashed.

Text ads took a little time to really catch on.

From a consumer’s perspective, text ads didn’t garner much trust nor were they very visually appealing in the early days. Users were wary of them, preferring the organic listings that weren’t “sponsored.”

For businesses, text ads were seen as a mediocre alternative to display advertising, used mainly by businesses that couldn’t afford the high costs of creating display ads or the high CPM driven costs for the media.

However, now that the Internet and search have evolved and become a part of everyday life, text ads are no longer something to avoid and are trusted by consumers. That doesn’t mean that display ads are dead. On the contrary, there is still a place and time where they are highly effective but in this consumer-driven economy, pull is working better than push. As the study by GroupM mentioned, search marketing is really “intention marketing.” And that’s a pretty powerful tool for marketers.

So perhaps, search is still reaching a mature phase of growth while display had already hit its prime.
 
Companies are now starting to see the value in search marketing but shouldn’t discount the value of display advertising. In fact, a recent Atlas Institute study demonstrated that users exposed to both search and display ads convert at a higher rate: an average of 22 percent better than search alone and 400 percent better than display only.

Any good company will work to achieve a balance within their marketing mix, incorporating both.

Search Engine Marketing Banner Ads, digital advertising, display ads, Search Engine Marketing, text ads

There are exceptions to every rule and it is important to analyze each situation on its own merit. But as a general starting point, a good rule of thumb for creating online ads is to remember the following: successful offline advertising gets consumers to buy products or services; successful online advertising drives consumers to a website, which in turn should sell the consumer.

For example, the ultimate goal for a television ad for dishwashing liquid is to convince the viewer that the next time they buy dishwashing liquid, they should buy that particular brand.

An online ad for dishwashing liquid can’t really get enough information across to convince a user to buy that product. The online ad takes the user to a website that extols its benefits. Even if that site is not an ecommerce site and doesn’t sell the product, the purpose of the site to convince the user that the next time they go out to buy dishwashing liquid, they should buy that particular brand of cleaner.

The online ad program should influence the messaging: PPC versus CPM

Ads running on a PPC basis should first create interest and then qualify the user before they click through to the site, since each click will cost the company money. Qualifying the user first stops wasteful click-thrus and increases ROI.

Ads placed on a site with a weekly or monthly CPM should create interest and drive as much traffic to the site as possible. Since ad expenditure is based on the number of people that have the opportunity to see the ad and not how many people click on the ad and go through to the site, the ad doesn’t need to qualify users as much as a PPC advertisement. But that doesn’t mean you should write an ad that sends everyone to the site. It means an ad on a CPM site doesn’t have to qualify the user as much as a PPC ad.

Remember, there are certainly exceptions to this rule and we’re not talking about branding efforts online.

If you take one thing away from this post it’s this: online ads drive traffic to websites, which then sell the users on the product.

Marketing advertising, AdWords, Banner Ads, PPC