Display ad spending to hit $200B, says Google VP
Display advertising spending will rise from $25 billion in 2010 to $200 billion "in a few short years," Neal Mohan, VP of product management at Google, told attendees of the Interactive Advertising Bureau's "The Future of Display" event on June 9 in New York.
The projected increase “is the reason why we at Google are investing so heavily in display advertising,” said Mohan.
However, the predicted eight-fold growth comes with a few strings attached. Mohan said he expects the number of ad impressions to decrease 25% per user.
“I think this change toward fewer ads is inevitable,” he said.
The predicted drop aligns with Google's approach to search advertising, which is that if an ad is not performing at a certain level, it's better not to show ads. The value of each ad should rise as a result, as should ad-engagement rates, by reducing the number of ads served to consumers, he said.
Mohan also said advertisers need to surrender some control to consumers to achieve this level of success. He predicted that consumers will come to influence 25% of the ads they see, meaning they may control whether or not to view an ad or establish preferences to ensure more relevant ads are served. To illustrate the point, he referenced consumer statistics from Google's Ad Preferences hub.
“For every one user that opted-out of [ad targeting], a full seven didn't opt-out but actually customized their interests so that the advertising that they got was much, much more catered to what their actual interests were,” said Mohan.
He also predicted that in coming years, 25 billion ads per day will communicate the processes used to target individuals.