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Display Advertising Coming on Strong – But Don’t Neglect Search Just Yet

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This week eMarketer released a study on digital ad spending trends which projects that display advertising spends will eclipse search advertising for the first time in 2016. The news is not unexpected. We have seen this coming for some time. Much of this is driven by increasing consumption of information via cell phones and other mobile devices. What does this mean for location-based businesses who rely heavily on a well-placed digital presence? I have two observations:

1) It’s good news.

2) Let’s not bury search just yet.

#1 – How this information helps you. The increasing role of display advertising motivates businesses to evaluate their digital marketing mix. It is never good to rely solely on one channel to drive digital marketing. Those who diversify their strategy to leverage a mix of advertising opportunities are wise. Search visibility alone becomes more challenging every year—even without considering the increased user behavior fragmentation caused by mobile devices. The root of the challenge is that Google and other search engines increasingly tweak their algorithms in ways that give more prominence to big brands and budgets. This makes incorporating display advertising into the mix important for driving visibility. Even so, keep in mind that mobile display space is also at a premium as Google has aggressively monetized that screen.

So, it might be time to consider additional categories including display and video advertising and other players, namely Facebook, Twitter, and Instagram. They all offer the advantage of broad reach that Google had in the past. The good news is that there are more options and much more user data available to help you manage your advertising strategy than you had with old school marketing.

#2 – Don’t abandon search just yet. It is still a central piece of the mix.

Let’s take a look at the numbers. Search spending is still projected at roughly $29 billion compared to display spending at $32 billion. If you look more closely at display, though, you see that the $32 billion has four components–and none of these are equivalent to the search spend alone. The largest of these components is “Banners and other” at $13 Billion, which includes Facebook news feed ads and Twitter ads. To my old school way of thinking, those are not the banner ads that existed back at the dawn of Internet advertising. They are far better. However, they alone still do not top search in terms of use and effectiveness.

Additionally, since many of the video, banner, and display ads are actually retargeting ads, it’s clear that some sort of search advertising played a part in creating the situation where a display ad even had the chance to get an impression.

Are my two observations mutually exclusive? No way. Diversity and being where your prospects are is the best strategy going forward. So these numbers are great for highlighting how different advertising channels have matured and why they need to be a part of your strategy portfolio. Just be advised that search is still a major component, as the numbers illustrate. Location-based businesses need to keep this big picture perspective in mind, have an expertly-crafted strategy, and rely on an expert partner to execute the strategy most effectively.

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