As online advertising spending continues its meteoric rise — the Wall Street Journal is reporting a healthy gain of 20 percent in the second quarter alone — not every form of advertising is enjoying such success. In fact, as economic troubles continue, more and more advertisers are only willing to spend money on search ads and are increasingly ignoring other forms of advertising.
According to eMarketer, search ad spending will reach $10.4 billion this year, more than twice as much as advertisers will spend on display ads. More importantly for Google, search ads will represent 42 percent of all advertising spending, while display ads will account for just 21 percent of all online advertising.
With an economic downturn running amok, Google is quickly becoming one of the few companies that can actually withstand its onslaught. Because search results currently provide the best place for advertisers to spend money and realize a positive ROI, Google’s control of over 60 percent of the search market becomes even more important.
“We believe that if there were (a U.S. recession), we’ll be well positioned,” Google CEO Eric Schmidt said in a recent earnings call.
Generally speaking, search ads are better targeted than display ads. And in an environment where companies have less money to go around, they need to find the best ways to utilize that cash and speak to the target audience. For now, display advertising will not be the best place to spend ad dollars and although Microsoft and others will do their best to compete, Google is still in the cat bird’s seat.
Just don’t mention DoubleClick.
Nice mixing of verb tenses from Schmidt. Get that man into politics.
lol! i was thinking the same thing … but really when did he say this 2007 ?
Doesn’t Google have a minimum GPA for employment? Maybe it is only for engineering courses…
As an independent business owner, this info is really helpful as to where I will be spending the majority of my marketing budget for the next year. Thanks for the heads up. And be looking for my life coaching search ads on a Google browser near you.
Meanwhile we reckon that search growth is slowing as the market matures: http://www.clic...ml?page=3630747
I’m a big believer in paid search, but for some brands/companies/topics/ideas, you need to make people aware first and display achieves that. Yes, paid search ads are almost always relevant to the person searching, but sometimes people don’t know what they don’t know…
Does anyone believe that video will attract a meaningful portion of online ad spend over the next year / 2 years?
I believe that advertising on video portals like YouTube will pick up, but video ad units served via contextual programs like AdSense probably won’t be adopted as quickly. Even YouTube and Vimeo still have trouble with flash compatibility across browsers – there are a lot of folks (25% of all Internet users) still running around with IE6 and Flash 7 and earlier. The fact is that online video technology ITSELF hasn’t matured, let alone an advertising market that depends on that technology. Aside from technology, there’s also the whole bandwidth issues that comes with video units – you don’t have much time to get people to notice a video ad once a page loads; banner ads still have this problem, so you can imagine that this is even worse for video.
However, video advertising might do very well in niche groups where technology/compatibility are not a problem. Video gaming is one that comes to mind.
Search is always gonna be among the top. But, because of the way Google and other search Algorithms work, its not gonna make other ad venues go away.
For example, at any given search “sponsored Links” are mixed with “non sponsored”
should this change and users start seeing more of sponsored link than others that will in-create 2nd guessing on the part of users(I’m i being served by sponsored links rathar than what i searched for).
That principle helps keeping the balance(diversity of online Ad market).
In the future, it comes down to which search engine people go for search and as long as that is diversified everybody wins.
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Advertising is definitely moving online but I think the recession we currently in will remind people just like 2001 that you need others of making money outside of adversiting.
Jippidy.com – Video Yellow Pages
This is to be expected as adwords are easier to track and get ROI from. Display ads can work but when money is scarce the highest and best use theory suggests the lesser forms will suffer.
This trend will change quickly as soon as advertisers start looking at the studies done on the value of running display + search ads. This closing of the gap would them benefit companies with strong display initiatives.
http://mattlill...im-display.html
“When marketers supplement search with display impressions, they get a significant lift in conversions. Unfortunately, most advertisers that run both search and display are unaware of this…” The study demonstrated that “users exposed to both search and display ads convert at a higher rate: an average of 22 percent better than search alone and 400 percent better than display only.”
I currently work for an online video platform, PermissionTV. We focus on embracing the webs ability to provide a custom user experience and interactivity with video. I don’t believe video has reached it’s full potential on the web. In my opinion it’s only a matter of time before companies realize the power of online video advertising.
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