Search vs. Display Ads- Is there enough room for both in the digital world?
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.
