One of the earliest forms of online advertising, display, currently accounts for $7.8 billion in annual spending or about 30.4% of all online ad spending. Display advertising spending is predicted to reach $16.9 billion in 2014. At that point, the segment should still comprise about 30% of online ad spending according to Forrester Research.
While many have suggested that online display will shrink as search grows, marketers note that there are two good reasons to continue allocating part of the budget to various display formats:
- Easy and accurate return on investment (ROI) measurement
- Variety of media formats
According to Forrester Research, marketers prefer display pay-per-click (PPC) online campaigns which allow them to pay for exactly the number of times consumers show interest in an advertisement. This compares to impression-based ad campaigns which can be more cost-efficient but present difficulties when it come to effective measurement. Currently, impression-based campaigns account for 38% of display ad campaigns while spending on PPC campaigns takes up 58% of ad dollars in this segment. The other 4% is spent on marketer sponsorship of specific Web sites. By 2014, Forrester analysts predict that the easily measured ROI results afforded by PPC campaigns will allow this component to reach 66% of all spending on display advertising.
Marketers also appreciate the variety of display ads available. Currently, spending on display ads breaks out as follows:
- Contextual ads $1.942 billion
- Static image $2.4 billion
- Rich media (excluding video) $2.616 billion
- Online video $870 million
While spending on online video currently claims 11% of online display advertising, Forrester Analysts expect that figure to rise to 17.8% of the segment by 2014. Clearly, the last word has not been written for display advertising and marketers will continue to use this media format far into the future.[Source: US Interactive Marketing Forecast, 2009–2014, Forrester Research, 2009]