Online display advertising trends for 2011-2012

A steady growth

While becoming more and more complex to manage, online display marketing still grows at a steady rate, even in these difficult economic times.

According eMarketer above, and confirmed by last figures released by Interactive Advertising Bureau (IAB) in September, Internet ad revenues rose 23.2 percent —to a record $14.9 billion— in the first half of 2011. The rate of growth more than doubled year-over-year, as last year’s first-half ad revenues growed 11.3 percent over 2009.

Annual Figures
The following chart highlights half-year Internet ad revenue in last years (in millions); dollar figures are rounded.

% Growth
HY 11 $14,941 23%
HY 10 $12,127 11%
HY 09 $10,900 -5%
HY 08 $11,510 15%
HY 07 $9,993 26%

Key trends: New places to advertise, Ad exchanges and Data-driven performance

Today, advertisers are getting better results through innovations that make it easier for them to find the consumer they’re looking for, and deliver a relevant message, despite the fact that Display market is still smaller than the Search one (see below).

1. New spaces are growing and getting more advertising interest

Online video

Online video sites like Youtube and local players, as well as a host of new players (MegaVideo, MixtureVideo, VideoBB) are booming : it’s more convenient (watch when you want) and it’s often more suited to your wishes (compared to TV).

As the boundaries between VOD, TV, movies and online video sites blurs in time, their usage is growing across the world. For instance, US VOD leader Netflix knew several issues this year because of high traffic spikes. In addition, Hulu got a lot of attention several monthes ago because of acquisition gossips from Google, Yahoo or other major players.

While it was common to watch videos with no advertising at all on YouTube or Dailymotion last year (meaning no bidder was interested and/or found), it’s less and less frequent nowadays to watch popular videos with no in-stream or sponsored link ad.

Anyway, online video consumption will certainly continue as it’s easier and easier to watch videos on a growing number of devices: tablets, pocket pc, consoles, ISP boxes, smartphones… And because video is the most appealing form of content online.

Mobile Internet

Mobile Internet is a reality for several years now, but studies show it is far from its full potential… realizing only 5% of total Internet traffic. That might be explained by differences in usage, for instance the bigger the video, the bigger its size.

Social network sites

This point is especially related to online video sites; as we know social network sites (especially professional ones in 2011) are still growing. The invasion of sharing buttons and social capabilities on all online videos tend to increase their consumption with strong viral effects (ie, when home-made videos reach millions of watches in days). Features like channels and automated recommandations based on interests are significant on YouTube.

2. Easier targeting, access and automation with ad exchanges

Ad exchanges, the main trend this year, is both a new technology (relatively speaking)  as a new way of buying ads. These advertising networks grow at a fast rate because it makes the whole display advertising process more efficient.

Before, ads were sold by ad networks grouping large websites (like medias). While these ad networks still exists, they now play along with large ad exchange platforms (such as DoubleClick Ad Exchange, InviteMedia, OpenX Market, so on…) that are online real-time ad marketplaces between buyers (advertisers) and sellers (publishers, site owners), working like an auction.

Main benefits of ad exchange networks

  • RTB or Real-Time Bidding (almost, there is a small latency after a user clicks on an ad link –  in milliseconds)
  • Automation (bidding, inventory, creative serving)
  • Improved targeting: Ad exchanges usually collect more detailed information and demographics about users on the spot, improving their relevance
  • Easier management of inventory
  • More efficient and profitable management for both advertisers and publishers (time-consuming process management tasks such as negotiation with multiple sites, replanning, sending insertion orders, managing hundreds of ad tags are all or mostly automated)

Qualitative forecast

According to Digitas and Google, this new way of buying ads increase overall ad spending.

While 88% of surveyed media buyers plan to buy in real-time in 2011 , 79% of them estimate that more than 10% of their 2011 digital display budgets will go to RTB. And we can fairly assume that this share will become the majority of budgets in the next years.

On the other hand, one could argue ad exchange networks might be tempted to raise prices over the years, while slowly dominating the overall Display advertising market. While it’s an open discussion, I doubt it because most networks can and already work together (allowing their users to navigate multiple competing ad exchanges).

3. Data-driven ads: better ROI and improved engagement

Fine-tuning user targeting

Thanks to RTB technology and other innovations in the online marketing process – including better integration, data is more and more at the center of online display strategies. While in the past, ads were mostly targeted with general site demographics (like age, gender, country, so on) they can now focus on each user at an individual, behavioral and granular level (e.g. a user who has previously visited their site – Retargeting – or searched for products they offer…). For instance, retargeting (or “remarketing”) is now a widely used technique, generally considered to generate better results in a client acquistion funnel.

Data-driven ads are more efficient

The more accurate the targeting, the better the campaign is likely to perform.

That’s why advertisers and marketers are now in an endless quest to integrate more and more data points to fine-tune targeting (web analytics, sales pipeline, content engagement, device used, buying habits, etc…).

According to Google,

Right connection happens effectively at two levels:
1. Reaching users in places, and at times, when they are consuming content relevant to a particular topic or brand, i.e. contextual advertising.
2. Reaching the people who have already shown an interest in a particular topic or brand relevant to your business, anywhere on the web, i.e. targeting an audience

That’s why a new kind of supplier is also in a fast growth stage : Data exchanges or DMP (Data Management Platform). Their aim is to serve as a data mart for all marketing activities of a company.

Data Management Platform

End notes

We live in exciting times for the whole market, including providers, marketers and even users. New developments, technologies and changes in online consumer behavior all form a complex equation to solve. Including marketing challenges to gather more and more relevant consumer data at each minute.

Not to mention that every day, online display advertising industry is able to deliver less interruption-based and more permission-based advertising than yesterday. Or at least, more relevant.

Around the web

Study: US Mobile user behavior analysis

YouTube on a fast-paced growth in the UK: the social video power

Five Key Trends for Display Advertising in 2011

Online Advertising Market Poised to Grow 20% in 2011

Google Ads Industry Trends

IAB US Internet Advertising Revenue Report

La pub online en croissance de 11% en 2011, le display dépasse le search en 2015


Market figures from IAB (First half of 2011):

View more documents from nextemarketing.

2 thoughts on “Online display advertising trends for 2011-2012

  1. Merci ! Je n’ai pas pu détailler suffisamment sur le mobile – en particulier la publicité vidéo sur les mobiles – , j’espère y remédier avec d’autres billets prochainement.

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