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Why Display Advertising Out-Paced all Other Channels in Y/Y Growth

display-advertisingDisplay advertising—that is, the paid placement of text, video, or even audio ads on websites—has seen rapid growth of late. For many organizations, the move to up the display ante makes sense, especially when you factor in the increasing number of mobile devices and touch points consumers use to interface with brands. Let’s explore the growth of display advertising and touch on what that means for your business.

Display Spend on the Rise

MarketingLand has dubbed 2016 “The Year of Display,” and it’s for good reason. For starters, experts have forecasted that digital ad spending will surpass search ad spending this year, and it’s starting to look like that’s going to become a reality.

Merkle’s Digital Marketing Report 2016 revealed display advertising has officially outpaced all other channels in year-over-year growth, increasing by 62 percent Y/Y in Q2 (see Figure 1). For some perspective, note that on the whole, paid search spend increased by 19 percent during that timeframe.

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Figure 1. Source: Merkle

So why the boost? It came thanks in large part to Facebook. The advertisers Merkle surveyed indicated they increased their Y/Y investment on the social giant by a whopping 121 percent, with 62 percent of all display spending attributed to Facebook retargeting initiatives. (Want to try Facebook retargeting? Here’s how.)

Another contributing factor is the impossible-to-ignore rise of mobile and social—specifically, for example, an increased consumer acceptance of in-feed video on social streams as part of the mobile experience. The mobile card is king in display advertising’s winning hand, especially when it comes to Google Display Network (GDN). Merkle reported that smartphones and tablets accounted for 28 percent of all GDN spending in Q2 of 2016, a figure that accounts for an impressive 12 percent of ALL Google’s spend during that time.

Mobile’s rise has a separate, yet highly relevant, byproduct: A surge in programmatic advertising. Programmatic advertising is defined as “automated bidding on advertising inventory in real time, for the opportunity to show an ad to a specific customer, in a specific context.” In other words, it takes the guesswork out of ad buying, making the process more flexible and data-driven—hence, more reasons for businesses to invest in these types of display ads. See Figure 2 for a visual breakdown.

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Figure 2. Source: Smartinsights

Wait, Don’t Consumers Usually Ignore Display Ads?

The short answer to that question is that it depends on your brand and your consumer base. My colleague Shelly Kramer recently made the case for influencer and word-of-mouth marketing over paid ad placement, and I agree with her. After all, 200 million people around the globe use some sort of ad-blocking software, so there is a chance your banner ads won’t get the kind of clicks you’re hoping for.

But here’s the thing—what if they do?

Above, I touched on the potential of combining display ads and social media. It turns out that potential materialized big time for a big beverage company. By running video ads on Facebook, Heineken Light reached 35 million people in three days—a staggering 54 percent of its audience. That’s definitely a display ad success story, and there are more out there.

The key to success in your digital marketing strategy is to find a balance: Is display advertising worthwhile? Yes. Is influencer marketing worthwhile? Yes. Does word-of-mouth marketing still matter? Yes. These approaches aren’t mutually exclusive. As long as you diversify your marketing playbook and make every move with your audience in mind, you’ll go places.

Are you investing more in display advertising, contributing to its impressive growth? Tell us your story.

Eric Vidal
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