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The pros and cons of the growing display advertising market

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Display advertising

In the earlier part of the series, we looked at search advertising and its global growth. Another form of online advertising is display advertising, which is a type of online advertising that appears next to content on websites, instant messaging (or IM) applications, and email. These ads, often referred to as web banners, come in standardized ad sizes, and can include text, audio, video, logos, pictures, or interactive media.

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Benefits of online display advertising over traditional marketing channels

  • Faster brand building: Display ads build brand awareness very quickly, since people are more likely to remember what they see than what they read or hear.
  • Effective targeting: The Internet is a platform where people search for things of interest and then click on results that seem the most relevant. Therefore, display ads can effectively reach a large audience within a target market.
  • Real time performance tracking: Display advertising makes it easy to track the performance of an online ad campaign to see how many clicks, impressions, and conversions the campaign has received on a daily, weekly, or monthly basis. With this information, advertisers can then tweak the campaign as needed.

Limitations of display advertising

The drawbacks of display advertising are that it gives advertisers limited control over audience targeting, less transparency into inventory costs, and no easy access to ad inventory. Plus, display advertising doesn’t perform as well as search ads do.

As the above graph illustrates, according to eMarketer, Facebook (FB) saw a 51% increase in net US digital display ad revenue in 2013 due to strong mobile ad revenues, and Google (GOOG) (GOOGL) witnessed a growth rate of 33%. Even though Google remains an undisputed leader in the display ad market, Facebook’s growth rate is pretty impressive and is gaining traction.

Besides these two players, Amazon (AMZN) and Linkedin (LNKD) are also making their moves in the display market. Twitter (TWTR) posted the largest growth rate of 90%, which is much higher than Yahoo. Read more about Yahoo’s struggle in the display ad market.

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