Digital Display Spending to Surpass Search Spending in 2016


If you haven’t noticed already, be prepared to see advertising budgets change this year. As brands continue to invest more in digital advertising, for the first time ever, spending on digital display ads will surpass search ad spending.

Though spending has increased, it doesn’t mean your ROI is through the roof; marketers are still struggling to engage people across multiple channels and devices—that is, until recently. Advertisers are realizing that addressability is the solution to the various challenges created by cross-channel behaviors. Investing in people-based efforts will help marketers leverage their data to connect with customers in real time. Now, what does that mean? By moving beyond cookies and tapping into first-party customer data, advertisers are able to reach the right person in the right place at the right time.

In a world where ad blocking is the new normal, digital advertising must get better. Improved targeting, formats, and relevancy have become crucial to breaking though to consumers. People-based efforts will help serve more relevant ads to potential customers, thus increasing the opportunity of conversions. The majority of earlier adopters of people-based advertising have seen higher click-through rates and higher conversion rates compared to cookie-based results. As we see digital display budgets increase, we can expect to see people-based advertising as the prevailing trend.

Display Ad Spend Increasing in 2016

Search advertising seems to be the “ol’ faithful” of digital advertising. It is usually the first type of online advertising a company tries, and they usually keep it as they explore additional online marketing avenues.

For the first time ever, advertisers in the U.S. will spend more money on display ads—specifically traditional banners, video, and native ads—than they will on search ads. According to eMarketer, display ads are projected to grow by 23% this year. Don’t get us wrong; money is still going to search ads, in fact, they are projected to grow by 10%. However, this increase in display is evidence to the fact that brand advertisers who love TV are shifting their budgets to online. Display ads are more accommodating to TV-style brand awareness campaigns versus search ads, which are most commonly used more for direct response efforts.

Though pre-roll ads seem to be the logical shift from TV to online, traditional banners and native ads will continue to grow over the next few years. Advertisers are expected to spend the remaining digital budgets on rich media ads and various sponsorships.

Why You Shouldn’t Focus On Click-Through Rates

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Display ads are nothing new. Having been around now for over 20 years, it has become a common way to advertise online. And when we say common, we mean really common. Did you know that on average you see 362 display ads daily? That’s approximately 22 ads per every hour you’re awake. With such a flood of information you can’t expect users to click on every ad they see; they would never get anything done. But just because a user didn’t click on an ad, doesn’t mean it wasn’t noticed and remembered.

In 1994, the first banner ad received a click-through rate (CTR) of 44 percent. Over the years, it has slowly declined and is now around 0.1 percent for standard display ads, not including video or rich media ads. But, that doesn’t mean display ads no longer work. As online advertising performance changed, so did the methods, strategies, and reporting. The click-through rate is no longer the key performance indicator (KPI) of a display ad.

Many businesses no longer focus directly on the CTR because they are more focused on quality over quantity and reaching the right person, with the right message, at the right time. The goal has now become to drive action that leads to a purchase, regardless if that translates to a click or not. Ads are driving more actions than just clicks, including website visits and product research, and they must all be taken into consideration when looking at a campaign’s performance.

According to SEOmoz, 53 percent of people surveyed said they were likely to search online for a product featured in an ad they saw, which is the same percentage of who said they would click on the ad. This proves that searching for more information is just as likely as clicking on an ad, it just doesn’t happen as fast. Seventy-four percent would click on an ad immediately or within an hour, while 52 percent would search online immediately or within an hour.

Several aspects influence the action a user will take on display ads, including how close they are to a purchase decision, messaging, age, gender, and income. Utilizing consumer data is extremely useful to reach a consumer with the right message at the right time, in turn increasing your possibility for a conversion.

Savannah web development agency Robmark Web specializes in various forms of online advertising, including display ads, search advertising, pre-roll, and more. If you are interested in reaching new potential customers through online advertising, please call (912) 921-1040.