In writing about Adfusion / ARA Lifestyle for my last post, I started to end by talking about display as a whole. It made more sense to separate out these thoughts into their own post.
Display is undoubtedly one of the most interesting areas not to mention the most ripe for innovation and growth. With all that has and continues to go on, how do run of network plays still thrive. One could write a treatise covering the possible explanations, but I have my own reasons and not one involves talks of a recession. They are a little light right now, and I'll be glad to expound upon them more fully.
1. Inventory Excess - No surprise here. There is too much inventory. The growth of sites is not a problem, but the growth of ad placements is. With each new page comes three ore more placements, all of which are not created equal. The solution is counter-intuitive, but we need fewer ads available. Making that happen is hardest among where inventory is most problematic, the many mid-tier sites loading up their pages full of ads, leveraging the ad networks willingness to place unlimited ads. Advertisers who shouldn't show end up doing so, and the cycle keeps repeating, diluting the good placements and ads.
2. Quality Control - Excess inventory and degrading quality go hand in hand. Certainly frustrating, if not controversial, Google's Quality Score has created a unified pricing strategy. Advertisers pay what they want but are charged in descending increments of that based on Google's scoring of the placement. That doesn't exist in display, and it needs to. Easier said than done because the factors impacting quality are fuzzier in display, especially because context plays less of a role. Recency and frequency aren't factors in search.
3. People Driven Technology - We are entering a renaissance of new technologies in display. They all though reply on people to sell at some level. The more complex they are, the more they require either a direct sales force or enable a third-party to make money on service arbitrage (like SEM's). Some of the best companies leading the new dispaly aren't better in technology. They are better at selling the value of it.
4. Branding First -The big money is with the agencies, and they operate very differently than the ecosystem that has sprung out to support search. We always talk about following the money, but it's hard to follow the money when it's like a dog chasing its tail. The process isn't broken per se, but it isn't working that well. The average level of sophistication among those handling the money reflects the very fragmented and convuluted way in which display currently operates.
5. Display / Search Divide - It is detrimental to keep separating the two. It is not the same as TV and Radio. Their futures are very much linked, and as studies will continue to show, having them work in conjuction is the only way. But, executing on that is no small task. Just look at me. I've been abusing the distinction this entire post because it's easier to talk in those terms.
Unfortunately, you are just scratching the surface on the mess that is online display :-) . I look forward to more in-depth discussions at Leadscon next week and hopefully if some of us can find more time from trying to change things to writing about what we see going on...!
Great posts as always, Jay.
Posted by: Rob Leathern | August 11, 2009 at 10:16 PM
Recency and frequency are factors in search but not in the same manner as display. This distinction, along with the larger role of context are three areas I believe can help improve display. The main differences with Search are twofold. 1) they are being calculated not only at the user level but in aggregate and 2) their analytic foundation is not the impression but actions (queries & CTR), price & (for Google) match type.
Looking forward to more of your thoughts on the mess.
Posted by: Jonathan Mendez | August 12, 2009 at 12:49 AM