Recent reports suggest that display revenues for Google and Facebook are approaching $2.5 and $2 billion, respectively. That’s obviously good for the search and social giants. It is also a boon to the online display advertising industry as a whole, especially in lieu of question marks regarding the value of display data and growing privacy concerns. By using Google and Facebook as growth models despite those uncertainties, there may never be a better time to leverage display as a campaign revenue generator.
Data has always been part of the online display advertising discussion. The major question has been and continues to be, “How do we use it?” Today, a variety of data partners and exchanges, including BlueKai, Exelate and DataLogix, are giving advertisers a way to better target their ads. Geographical, behavioral and demographic targeting greatly increases the probability of engaging relevant consumers. Now that Google is involved in the display mix, look for these targeting practices to improve through continuous testing and optimization.
Today, online display advertisers are looking for more demand for their dollar and leveraging social media into a display advertising program is one way to increase ROI by boosting ad awareness and purchaser intent with a minimal investment. Facebook is certainly driving its fair share of profits, but Twitter has also had success through its Promoted Tweets platform. Notably, it drove 85 million display impressions for Coca-Cola at a higher than normal 5.5% engagement rate as reported by Yahoo Finance. Twitter will soon launch a new display initiative, one that will directly target user streams.
Leveraging social media is not the only way to engage audiences. A good way for advertisers to reach their target demographics is through the use of online and offline behavioral data. The strategic targeting of potential consumers is at the heart of the data revolution. It involves bringing the appropriate ad to the right user at the right time.
If you’re unsure of how data targeting works, here’s an easy example. Think of your last search. Maybe you are a thirty-something woman living in New York. You might see a banner ad promoting women’s apparel sales. Believe it or not, this ad was targeted specifically for you. If data targeting was not in effect, you might instead see ads for Nascar. And while it’s possible that you are a fan of Tony Stewart, this would not be a cost-effective strategy. When properly purchased and placed, data can drive increases in click-throughs, conversions and revenue. The trick is navigating the vast data landscape by using it effectively with scale. Again, that brings us full circle in trying to determine the value of display data.
Regardless of whether you are Google, Facebook or another motivated display seller, the best way to quantify what data is worth is by leveraging the expertise of a robust ad network. A leading ad network will adhere to best practices improving targeting, information management and monetization methods. As for privacy issues, a top-tier ad network will implement enhanced privacy protections without hindering the user experience.
Display advertising is expected to grow by 60% in 2011, according to advertising consultants Borrell Associates. Add the successes of Google and Facebook to that statistic and it’s likely that revenue growth for this online performance-based media will remain on display for a long time to come.
Jake Gardner is the director of display ad operations at MediaWhiz.