Real-Time Bidding Could be Key to Display Advertising’s Resurgence
As search advertising thrives, display ads have taken a backseat. But could a change in the bidding system for display ads help the medium make a comeback in 2010?
According to eMarketer, $11 billion was spent on search ads in 2009, while $5 billion was spent on display ads.
Real-time bidding accounted for just 1 percent of all online display ad sales in 2009, according to Rajeev Goel at Adweek. “That number will rise dramatically to 3 to 5 percent this year,” he projects. “These entities are able to place a value on each unique ad impression, individually and in real time, using a judgment that takes into account proprietary data and technology. The result is better performing campaigns and greater advertiser ROI on those campaigns.”
eBay, according to Daphne Liska, senior manager of display and paid search advertising at the online auction giant, recently said that the company is shifting dollars out of its search budget and into display ads bought through real-time exchanges.
Forrester Research fully supports this kind of shift, since the CPM-based model that’s currently pervasive is inefficient. “The time for change is at hand,” the company declared in a report.
Display advertising will balloon at a 17 percent annual rate to reach $16.9 billion by 2014, according to Forrester. In 2009, this figure was $7.8 billion.
In a presentation, Forrester showed that marketers are pulling away from display ads purchased through ad networks and publishers. Better targeting for their ads would lead to increased spending on online advertising, according to a survey conducted in March.
According to Forrester, the best term for the notion contained in “real-time bidding” is “dynamic media buying optimization” (DBO), which it defines as “Dynamically adjusting the price of an ad impression based on its specific audience data and performance history.”
While the new system is still far from mainstream, 2010 could yield results that point to a sea change or stagnation, which would lead to a decline in display media’s effectiveness, according to 30 percent of marketers surveyed by Forrester.
ExactTarget, an e-mail service provider, recently revealed the results of its survey of more than 1,000 marketers. Fifty-four percent said they plan on boosting their e-mail marketing budgets in 2010, while 66 percent said they would boost their social media spending despite 80 percent of them admitting that there is still difficulty in tracking ROI in that arena.
Social media, which includes Facebook and blogs, among other outlets, to the surprise of few, is the “fastest growing digital marketing channel,” according to the company.
The study also found that 51 percent of respondents said they plan on boosting their paid search budgets, while 56 percent plan on increasing their mobile marketing budgets.
Thirteen percent plan to decrease their overall marketing budget, while 42 percent plan to leave their budgets untouched.
Sources:</strong
http://www.adweek.com/aw/content_display/news/digital/e3ia613cdbc5ebee2c5e2ac1eedc787a13e
http://www.digidaydaily.com/stories/forrester_calls_for_move_to_dynamic_media_buying
http://www.slideshare.net/AdMeld/media-buying-goes-real-time-emily-riley-at-the-admeld-partner-forum
http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=121930
http://blog.exacttarget.com/blog/the-exacttarget-blog/0/0/marketing-budgets-2010
