The Wall Street Journal just published an article on the growing spread between search (predominantly text) advertising, and display advertising, as the economic downturn begins to hit marketing budgets. Although advertisers, continuing to follow eyeballs online, have been pouring in money into online advertising, recent statistics from eMarketer suggest search advertising is reaping the largest bounty.

Here are some interesting statistics from the eMarketer report, referred to in the WSJ article:

• search advertising is projected to total $10.4 billion in 2008, double that of display advertising ($5.2 billion)
• in 2007, the figures were $8.6 billion for search ads, and $4.5 billion for display ads
• search ads will comprise 42% of the total online ad market for 2008 (it was 40% in 2007)
• display ads will comprise 21% (the same as last year)
• the overall online ad market is growing healthily, with a 16% increase to $24.8 billion in 2008 over 2007 ($21.4 billion)
• Google dominates the search ad market, with more that 70% market share

The growing gap between search and display ads reflects a sensitivity towards performance, over visibility and branding benefits. Search ads are paid for on a per-click basis (CPC) typically, while display ads are typically charged on a per-impression (CPM) basis.

What display ad networks might consider to respond to the direction of the market is to allow pricing on a CPC or CPA basis, to allay fears that online advertising spend might not demonstrate tangible response figures. Not long ago, site/placement-targeted Google ads had to be purchased on a CPM basis; recently advertisers were given the option to make the same sorts of placements on a CPC basis. Other ad networks that look at Google’s growth with a touch of envy might do well do copy some of their moves.

This entry was posted on Wednesday, September 3rd, 2008 at 11:19 pm and is filed under Online Advertising. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.