Today’s Dynamics of Online Display Advertising

Advertisers have historically had great success placing display ads in front of people. A quick look at the gazillions of dollars pumped into newspapers, magazines and TV over the years can attest to that.

Then along came a little innovation called the Internet. From the onset, advertisers struggled with the effectiveness of online display ads in this medium and soon settled for one-size-fits-all, short-on-context, big-on-neon, click-here-now search ads as watered-down alternatives.

But, as Bob Dylan would say: “The times they are a changin’!” [Of course, he also would say “everybody must get stoned”… but a debate on the wisdom and merits of that sentiment is well beyond the scope of this blog post.]

Change is taking place thanks in part to advertisers now having access to more dynamic, accurate data about web users. The other part of the equation involves innovative technology that integrates and optimizes the essential elements that go into online engagements—the audience, the message or content (creative) and the ad environment—making them single, personalized events delivered in real time. The messages can now be delivered in a variety of creative and interactive formats—when, where and how people prefer.

According to the Interactive Advertising Bureau (IAB), Q1 2011 set a record in Internet advertising with $7.3 billion in revenues, a 23 percent year-over-year increase. The increase is largely fueled by a surge in spending on display advertisements, according to recently released predictions by eMarketer, which estimate those spends to reach $21.99 billion by 2015 – that’s nothing to sneeze at!

Recent Forrester research tells us that amount could go even higher due to a number of factors. And, the No. 1 factor…drumroll, please…is better targeting of ads.

As one of the thought-leaders in the ad targeting technology space (and being the “geo-pioneer” so to speak), this is no surprise to us at Digital Element. Our customers report that targeted ads outperform standard ads, hands down. For example, Tumri, found that, on average, the targeted ads (using our IP-location datasets) served on its proprietary technology platform have performed 100 percent to 400 percent better than standard ads.

We expect that targeting will continue to improve through our innovation as well as others. In fact, as more companies in the ad space continue to adopt innovations, such as hyper-local targeting through NetAcuity Edge, as the new standard over “old-school,” less granular IP targeting, we feel that geo-targeted ad performance will continue to sky rocket!

So, if you’re in the ad space, to paraphrase Dylan one last time: “You better start swimmin’ or you’ll sink like a stone.” OK, that was bad.

Anyone wanna guess how high online display ad spending well go?**

**I guess I could say “the answer is blowing in the wind,” but that would put me way over the limit of Dylan references for one blog post.