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The world’s largest search engine is branching out. Google has spent the last year building up its display advertising products. Considering how thoroughly Google dominates search advertising, its recent obsession with digital advertising’s less profitable arm has perplexed many. But Google thinks the $20 billion that comprises the display ad market is just a penny in the well of what it could be….

Google made its name (and billions) by streamlining the search advertising process and increasing revenues. And that’s exactly what they want to do with display advertising now… How? By making the “overall display buying and selling process that much more effective.”

Display can certainly benefit from increased efficiency. According to Google, 28% of a media dollar gets eaten up by friction (administrative costs) in the display ad market. If that sounds high, consider this. Neal Mohan, vice president of product management points out that the old school method purchasing TV advertising only wastes 2% of a dollar.

In addition to increased efficiency, Google is excited about the swaths of content moving online. As video and mobile products become more advanced and more media creators are working on content for the digital world, the advertising opportunities are expanding.

Not to mention Google’s in-house advancements and key acquisitions + the scale of properties like YouTube. Google’s video site surpassed Yahoo in the summer of 2008 as the world’s second most popular search engine. Over the last year, the number of display advertisers running ads on YouTube has increased 10 times. In North America alone, 50 million impressions are served on YouTube’s homepage each day. Which means inventory on the homepage is often sold out.

Today at Google’s New York headquarters, the company wanted to reiterate that selling display advertising is not an experiment for the company. According to Barry Salzman, managing director of media and platforms in the Americas, display advertising is “a major part of Google’s business.”

“We’re bringing search together with display,” he says. The company is able to combine their media power with an impressive technology offering. “That’s the power of Google display.”

Flash and rich media a substantial portion of US ad impressions

To underline why Google is making this move a recent study from comScore shows that US ad impressions are up 15 percent over the same period last year

Key findings are that overall ads are getting bigger. Leaderboard banners (728 x 90) were the most commonly viewed display ad by size. While the study takes pains to point out subtle differences in whether the square is more popular than the rectangle as a creative format, it’s more notable that pop-ups continue to be near-extinct,

Jeff Hackett, comScore SVP pointed out that ”One of the several drivers of strength in this market has been the innovation occurring with respect to ad units, as larger and more engaging creative ad formats are employed.”

Source: eConsultancy

According to a recent academic study, big targeted ads online are actually no more effective than run of the mill banner ads. Combining the effectiveness of roadblock ads with targeting may seem like a no brainer to marketers, but web surfers aren’t responding as expected.

The University of Toronto’s Avi Goldfarb and MIT’s Catherine E. Tucker examined 2,892 distinct web ad campaigns on different websites. They then surveyed almost 900 people for each campaign.

Goldfarb told AdAge:

“We were interested in the basic question of whether ads work better if they’re targeted and more in your face, more visible,” “We were expecting some kind of linear effect, that you would get a particular jump in effectiveness — but the opposite is the case.”

Both matching advertising to its surrounding content and increasing an ad’s obstructiveness have proven to be effective ways of getting people’s attention online. But the study found combining both methods actually decreases people’s interest in clicking on ads.

And while its been years now that marketers have been proclaiming the simple banner ad dead, Goldfarb and Tucker actually found boring banner ads to be about as effective as highly targeted, obtrusive ads online. When a prominent ad is targeted, the study found people were only 0.3% more likely buy a product than when shown a regular banner with no contextual relevance.

According to Goldfarb:

“That has implications for more sensitive areas like finance and health sites. For people who are more privacy sensitive, there was an overall negative effect. For them, these ads don’t work at all.

“Our results show privacy matters in something of a subtle way in online advertising. Sometimes privacy violations are fine, sometimes they’re not.”

Privacy groups are quick to argue for the regulation of online advertising, but if targeted ads don’t prove effective with consumers, the issue isn’t likely to get to that point. Why would marketers pay more for ads that don’t work?

According to the study:

If advertisers replace ads that combine contextual targeting and high visibility with the standard ads that our estimates suggest are equally effective, we provide back-of-the-envelope calculations that suggest advertisers could cut ad spending by over 5% without affecting ad performance.”

Goldfarb and Tucker found that the larger ads simple magnified people’s perception of being manipulated by advertising online:

“Results suggest a possible explanation for the growing bifurcation in internet advertising between highly targeted plain text ads and more visually striking but less targeted ads.”

It’s common knowledge that customers often avoid looking at banner advertising online. Getting them to pay more attention to advertising that is relevant to their interests is a major goal of digital marketers. But if people are going to get turned off by more relevant ads, perhaps we’ve finally found an online marketing privacy breach that customers won’t ignore.

Source: Econsultancy

HubSpot has just compiled 27 statistics, soundbites, and slides from a variety of sources, including marketing thought leaders and research institutions.

The Social Media presentation includes 27 slides on:

• Social Media Marketing Statistics
• Definitions and Explanations of Social Media
• Free and Paid Social Media Tools
• Social Media ROI Statistics

See the report online here or download the entire presentation as a PPT file or PDF file for your own use.

While following the World Cup in South Africa I sometimes find myself searching for scores and more information about the games and players. That is also the reason for Google launching a new service where you can keep up to date…

The service basically helps you find information you need (tadaaaaaa ) – so when you complete a search related to the World Cup, you’ll see live scores, latest results and match schedules at the top of your search results. You’ll also find TV broadcast information and quick links for game recaps, live updates, standings and team profiles. The feature works on all Google search domains in 44 languages, including Afrikaans, Amharic, Swahili and Zulu.

Example searches: [world cup], [world cup spain] and [world cup group g]

Caffeine indexing system
Also just announced is Google’s completion of a new web indexing system called Caffeine. This new indexing system provides fresher results for web searches (nearly 50 percent fresher than Google’s previous system) and it’s the largest collection of web content Google has ever offered. The reason for building Caffeine was to help us meet the evolving expectations of their users, especially as content across the web becomes more global and is published in real time.

Source: The Official Google Blog

Over @ eMarketer I found this article about online ad spending in the Asia-Pacific region – the takeaway: Things are heating up much faster in the region than expected…

Several recent reports have drawn some interesting conclusions about the online advertising market in the Asia-Pacific region. The Nielsen Company recently reported double digit growth for Q1 2010 advertising spending in Indonesia, Taiwan and Thailand over the same period in 2009.

Nielsen’s Hong Kong office also recently reported that online ad revenues reached HK$255 million ($32.7 million in US dollars) in Q4 2009 to boost full year spending to HK$869 million ($111.4 million US). The total number of advertisers and campaigns more than doubled from Q4 2008 to Q4 2009, signaling an acceptance of online ads among advertisers in Hong Kong.

The Interactive Advertising Bureaus of Australia, New Zealand and Singapore also recently released their latest data for total advertising spending, with the Web leading the way. Online advertising in Australia was up 17% in the first quarter of 2010 year-over-year, propelled by a surge in search and directory spending. In May, IAB New Zealand reported a 12.3% increase in Q1 2010 and IAB Singapore estimates that online spending grew 30.2% from the first half of 2008 through the first half of 2009.

It all boils down to one point: Online advertising saw sustained growth throughout Asia-Pacific, compared to a 9.8% contraction in total advertising spending worldwide from 2008 to 2009 as estimated by ZenithOptimedia.

It’s not anything new to say that Asia is a huge opportunity for marketers looking to reach out overseas to seemingly untapped masses. What this data does show is that online advertising is booming in the Asian market, and for the first time, marketers won’t be able to count on Asia being “untapped” much longer, at least online.

Source: eMarketer