Display Ad Spending Surpasses Search Ad Spending in 2016

There is a lot to be said about the success and growth of display advertising moving into 2016.

Search Engine Land published an article: The 5 Reasons Paid Search Will Be Second Behind Display Starting Next Year In The US repeating a prediction widely accepted by many that: “In 2016, search engine marketing will fall behind online display as the dominant channel for US digital marketers in terms of dollars spent.” His statement is supported by findings from eMarketer postulating that marketers will only spend $29.24 billion on search ads in 2016 compared to $32.16 billion in display ads. Comparatively, in 2015 display advertising and search advertising were nearly evenly matched with display ad spending accounting for $26.15B and display at $26.53B. The trend is expected to  continue with display advertising leading search advertising by a widening margin.

When deployed and managed properly, display advertising is uniquely suited in some areas where paid search isn’t, and can be easily incorporated into a comprehensive digital advertising campaign.

1. Search engine query volume is stabilizing. In the beginning, search volume growth was dramatic for search engines such as Google which grew by 17,000% between 1998 and 1999. Growth has dramatically slowed starting in 2005 and stabilized in recent years growing at 10-15%. Since paid advertising is a pull medium (requiring an action or search to trigger the ad) it would make sense that an indirect correlation exists between paid search volume and the amount of money companies are willing to allocate towards it.

2. Display ads are readily available. Display advertising operates differently than search. As a push medium, those ads can be displayed anywhere. With over 47 billion pages on the internet there is plenty of ad space inventory. This creates an environment where display advertisers are competing for your business.

3. Marketers are scrutinizing dollars more and more. Marketing departments are scrutinizing every dollar spent. Paid search campaigns are attractive in that they’re highly measurable and it’s easy to track ROI. Paid search is highly effective for companies going after high tier, branded, and high ROI keywords and phrases. Display advertising begins to become a more effective investment at this level.

4. Marketers have become more sophisticated and savvier with display. Ad networks earned a somewhat sinful reputation for “slinging banners” and poorly regulating bots and fraudulent clicks. They have evolved now to offer better viewability and verification systems that help marketers avoid the bad inventory. Advanced attribution will help you determine the impact that its having for your organization.

Display advertising underwent a renaissance with programmatic advertising. Demand Side Platforms (DSPs such as Google Display Network (GDN) emerged to create a marketplace for banner ad inventory. This allowed organizations to buy highly targeted ad impressions at the rates they needed.

5. Digital marketing budgets are going up, and SEM doesn’t dramatically scale.  The growth and effectiveness of paid search accounts is likely to run parallel with the 10-15% year-over-year projected growth of organic search queries for keyword sets. While stable, this presents a compelling reason for marketers to diversify their marketing spend on (re)emerging advertising mediums such as display advertising, which can scale to meet your requirements.

Paid search advertising will never truly go away as organizations dedicate greater portions of their advertising budgets towards online advertising. Display advertising has something to add to that discussion and strategy into 2016 and beyond.

SproutLoud can design a very scalable go to market solution for your localized display advertising needs through your channel partners. We are seeing a surge in these types of requests from our current and potential brand partners. Happy to help if you are interested.

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