Focus on branding helps display start to close the gap
Growth in spending on online display ads will outstrip that for paid search through 2014, eMarketer forecasts, though search will continue to take the greater share of dollars.
In 2010, both search and display will see increases greater than the rise in total US online ad spending, estimated by eMarketer at 13.9%. But between 2011 and 2014, eMarketer projects online display spending will grow faster than overall online spending, while search spending will lag slightly behind.
The increase in display advertising will be driven partly by the dramatic rise predicted in online video advertising, set to grow by at least 34% every year through 2014. Banner ads will experience more moderate gains of between 7% and 16.2% annually, while rich media spending will stagnate.
In 2010, eMarketer estimates US advertisers will spend $12.37 billion on paid search, compared with $8.88 billion on online display ads. Search will still get the most dollars in 2014, at $18.84 billion, but display will have closed the gap somewhat and reach $15.92 billion in spending that year.
“The growth of display doesn’t necessarily mean that advertisers are spending less on search,” said David Hallerman, eMarketer principal analyst. “Much of the display ad spending gains are new dollars coming online—which is part of a bigger trend towards more spending on branding, rather than spending focused on direct response alone.”
Display ads like static banners have a bad reputation for low clickthrough rates but still serve an important branding purpose. “Banner ads today mainly have subliminal effects on the audience,” said Hallerman. “That makes banners difficult to measure directly. However, the uptick in search results due to banners from the same advertiser is a long-standing pattern seen by sophisticated digital marketers.”
eMarketer predicts branding-oriented online advertising will increase its share of the US total from 36.3% this year to 41.4% by 2014, with direct response making up a commensurately smaller part of the pie. Display’s high growth rates, and especially the dramatic growth expected in online video advertising, will be the main factor behind this trend.
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Check out today’s other article, “Local Mobile Ad Spending to Continue Dramatic Growth.”