Data On The Web Display Ad Market

The first application built on the isocket platform is a direct sales application for web display ads. In simple terms, its a tool for website owners to sell banners on their own without using an ad network. This is what most of our current private Beta testers are using – in fact, you can see two demonstration ad spots (125×125′s) in the right column of this blog.

This “economic crisis” has caused a lot of discussion about the decline in the ad market and what 2009 will be like. There are a few areas, like newspaper and radio (see tomorrows post about this topic) that have really tanked.

In the online ad market, some doom and gloom predictions talk about a decline of 1 or 2%. The average prediction is that the market will grow only 2 to 3%. While that looks bad when compared to the 20% or more growth web ads experienced over the last few years, 2% growth in this climate is still growth.

What we wanted to highlight is that it’s not always the top-line market numbers that are important, but the shifts happening within that market.

Venture Capitalist Fred Wilson wrote a great post about how display advertising works differently than search. The important part:

The basic insight from the report is that display advertising does not normally result in an immediate click. That makes sense because the ad is not being presented in a moment of purchase intent, like a search ad is. But the ad does create interest in the product or service which is realized at some later date in the form of a site visit, a search query, and possibly on online or offline purchase.

This jives with a study that showed display advertising metrics may not capture all of the value or results.

A Specific Media study finds the presence of display advertising significantly affects click-through and search style across both paid and organic searches. Findings suggested consumers exposed to display ads are more likely to search for brand terms (like “BMW”) and segment terms (like “635 CSi”) than unexposed ones.

A new report called “No Improvement on Horizon for Standard Online Advertising” outlines the minimal/flat growth over the next year. But look at the two graphs associate with that post:

While everyone is focused on the top-line decline, advertisers that want to reach “local” audiences are spending more than ever before.

“Local” should include niche, targeted and small business advertisers – they all want to buy display advertising, but don’t have the budget or the need to buy national level campaigns. Direct sales, where an advertiser and a website publisher work together to buy/sell an ad, is the best way to achieve this.

But “local” advertisers still have a hard time with web ads. As buyers want more narrowly targeted display ad audiences, they will need an easier way to purchase those ads.

And that’s exactly what isocket does. Our service makes it easier for those “local” buyers and sellers to connect and conduct these more narrowly targeted campaigns, without all the mess and hassle that usually comes along with it.

Tagged as: Advertising, Beta, display, web