Comparing Search and Display

Display advertising goes hand in hand not only with internet advertising but all of advertising. In fact display predates all other forms of advertising, except one - search...sort of. It wasn't called search, though; they called it classifieds. No one will accuse classifieds of being a sexy form of advertising or one sufficient to build a brand, classifieds are the great equalizer. Every company wants more customers, and while not everyone can create a newspaper ad, a billboard, a page in print, a good looking banner ad etc., everyone can create and afford a classified.

As surfers, we so many ads - both display and other - that we might not stop to think about just how many advertisers make up the bulk of the impressions we see. The answer, with respect to display, is not many. This shouldn't come as a surprise, but I thought it at least a worthwhile exercise to look at their differences as a way to understand why they act so differently. The billions on display come from perhaps one thousand active advertisers, whereas the billions in search come from hundreds of thousands. While not exhaustive, I chose three attributes which highlight the differences and apply to any ad channel - Ad Creation, Targeting, and Aggregation.

1. Ad Creation

With respect to ad creation, search versus display comes down primarily to text versus graphics, and they can be looked at across a spectrum from simple to complex.

(Where things get tricky and why Google AdSenes flourished so greatly is that it blurred the lines of search and display, using technology to make them equal from an ad creation standpoint. Do we consider AdSense ads display because they often occupy spots allocated for display or search because they are keyword targeted and look like search ads? There is no right answer I believe, but it's left out of this comparison because when people hear display, they think graphics, and it is the graphical market which illustrates the concentration issue.)

For the sake of this analysis, we'll mark it as either one or the other, depending on where it most closely falls. Some might argue that graphical ads aren't that hard, but unlike text, they do require a skill. A person of average computer literacy can create a search ad, but they can't create a banner ad. Thanks to advances in technology (for example Adready), after a decade of being out, banner ads have started to close that gap, but search versus display still comes down to skilled versus unskilled with respect to ad creation.

	Simple	Complex
Search (Text)	x
Display (Graphic)		x

2. Targeting

After making your ad, next comes having it shown to an audience. Both search and display strive to show the right ad at the right time, but they do so in fundamentally different ways, and unfortunately for display, search has a fundamental advantage in two ways - active versus passive and contextual versus behavioral. Let alone the second distinction for a moment as that can cause contention. At its core, search involves a user looking for something and receiving something in return; display involves looking at something and inferences being made about the user's intent. As a result with search and search advertising, each keyword becomes a marketplace and the universe of available targeting options becomes not quite infinite but incredibly granular. Display on the other hand lacks the granularity. Advances have allowed contextual approximation and/or attributes to be appended to approximate behavior. As such, we show text ads in display spots, but they still don't qualify as search. And, on the whole, regardless of the current advances, display targeting has yet to mirror the granularity in targeting and active nature of search.

	Granular	Broad
Search	x
Display		x

3. Aggregation

The last piece of the puzzle comes down to scale. It's not just that search offers more granular targeting than display; it's that it can deliver more volume across a wider strata of audience segments. More importantly, it's easier to buy across these segments from a single interface. Granted a large part of that has to do with Google's absolute stranglehold. Display doesn't offer such an entry point. The ad exchanges and ad networks all help, but at the moment, until they can combine with the other key components, it's like buying a one-size fits all. It will work for some, but not many. Aggregation definitely exists among display, but it's what we would consider limited aggregation, like buying on Fox. As a station they have a huge market share, but they don't have great representation across the entire universe of content.

	Aggregated	Fragmented
Search	x
Display		x

Microsoft-Yahoo, or Yahoo-AOL, or AOL-Newscorp, etc., in the end, I want not just another company but another format compete with Google's search dominance. There is a reason offline display evolved after classifieds, which is why we shouldn't confuse the maturity of display with its age online. It has already come incredible distances, but don't confuse progress with arrival. Then again, there is a real chance that display will never catch search, that it will never offer exact parity. If it wants to achieve parity, we have a framework for doing so, but that might end up being the best bet. If display were a business, it needs to decide what it wants to achieve. Copying search might not provide the best path for our success. If that is true with display, it either needs to find the framework right for it once it realizes that matching its competitor will not prove attainable. I hope it figures it out soon.

Comments

[LeadCritic]

Good post Jay,
I think we can agree that Search and Display are totally different.

Display simply is interruption as is TV, Print, Mail, telemarketing, etc. SEM results are simply results of a search, similar to a classified ad. The problem with the results is that they are limited to the amount of people searching.
Interruptions are easily scalable and can possibly induce future searches, but will never be as successful and targeted as search, IMO. I am not sure there will ever be anything comparable.
The closest thing I see is the innovation's in behavioral targeting. This gives you the ability to target your display ad on a granular level and increase the repetition of impressions on a single person.

I don't know...maybe I should stop drinking the search cool-aid.