The ‘90s – the good old days, when the Internet was new, IPOs were easy, and $50 CPMs were normal. Unfortunately, from the height of the ‘90s we saw display CPMs crater in the post bubble pop that followed. Many predicted the demise of the “banner” ad and consequent death of display, but thankfully, things have turned around in recent years.
Now, display is growing at a healthy rate. I recently attended the AppNexus Summit in New York City where Joanna O’Connell, Principal Analyst at Forrester, shared insights predicting programmatic buying revenues will continue to increase through 2017. Not bad!
The average CPMs have also been increasing – a recent MediaPost article cited Forrester predictions of CPMs rising from an average of $3.17 to $6.64 by 2017.
Lets dig a little. Why have CPMs risen? Why is display suddenly back in the spotlight? As I look around at our industry, I see a number of reasons for this re-emergence. The rise of exchanges has enabled a more “robust” market. New targeting options, which are sensitive to concerns about consumer privacy, have brought a wealth of data to the exchange ecosystem. These targeting options provide the savvy advertiser new and unique ways of reaching their target audience.
In my opinion, this is the most important reason for the resurgence of display: the increasing realization by many marketers that display is not search and shouldn’t be measured by the same “click” based yardstick.
The Difference Between Search & Display Metrics
Search marketing is a complex topic, and has developed into a rigorous discipline. Keyword search marketing is very similar to the ads in the Yellow Pages. In the ‘70s, if you wanted to find a business, everyone went to the Yellow Pages. The larger the ad in the Yellow Pages, the more calls that were generated. You could readily measure how a larger ad performed for you by monitoring call volume. If you got the sale, great, and if you didn’t, then you either put the ad in the wrong place or the interaction with the consumer was wrong.
Unfortunately, the easy metrics in search advertising have convinced many marketers that they should apply the same measures to display based advertising. Those marketers are now realizing that display is about reach, awareness and moving the customer into the purchase funnel as well as helping them through it.
Imagine a billboard you see on your commute to work everyday – no marketer would dream of measuring the response the same way that the response is measured for ads in the Yellow Pages. The mediums are different and the ways they are measured should vary.
Traditional media is all about audience; everyday we are realizing display is, in many ways, similar to traditional media. Consider search retargeting for example. While it is a display targeting strategy built of innovative technology, it is also very audience-focused.
If you look at my search history over the last seven days, I might fall into the category of an international traveler, tech savvy consumer and even an in-market car shopper. I might be the perfect candidate for a new car ad, international hotel deals and the latest Apple gadget.
However, aiming to get a consumer to stop what they are doing and take another action because of an ad isn’t realistic in all cases – just the way an advertiser does not expect a television viewer to stop watching their favorite show and immediately take action. Display, especially ad targeting, should be held to its own set of metrics.
When we think about what the re-emergence of displays really means, we should consider what it has become. While it is not the direct response world of search or large-scale awareness of a billboard or 30-second TV spot, it is quickly proving to be the best of both worlds. Simply put, display bridges the gap between awareness and audience targeting and is the channel that has forever changed the advertising industry.
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