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.”