Last month eMarketer ran an article claiming that display advertising would overtake paid search this year. Off the back of a study ran by the publication it says US digital display ad spending will surpass search ad spending in 2016. Which is a pretty big claim, but perhaps an inevitable one given the rise of video advertising and rich media.
Here’s the thing, though: this study focuses on advertising spend in the US, while the UK is busy setting its own trends in digital marketing spend. So can we expect a similar surge in display advertising here in 2016?
Display advertising to take the lead this year
If eMarketer has got its numbers right, display ad spend will overtake search for the first time in the US this year. Display has been catching up for a while now, thanks to growing investment into video advertising and rich media (interactive ads), but banner and social ads are also doing their bit to push the rate of display spend in the US.
Here are the figures as eMarketer puts them:
As you can see, search and display spends were almost neck and neck in 2015 and eMarketer projects that this is the year where display starts to edge ahead. It’s no surprise that video and rich media are driving the push – a combined $12.9m of ad spend in 2015.
What may surprise more marketers is how big a role native ads (“banners and other”) will continue to play in display for the coming years. Native ads have taken the initiative over the loud, obtrusive banner ads we remember from cruder times. Which has forced banner advertisers and website owners to take a more subtle approach to keep themselves in the game – and the figures suggest it’s working.
So what does all this mean for UK advertisers?
While display is set to overtake search in the US for the first time, advertisers here in the UK are busy setting their own records. In 2015 the UK became the first country to spend more than half of its total ad spend on digital formats. Official figures are yet to come out, but expenditure reports last year forecast that 51% of all UK ad spend would be digital in 2015.
And, guess what – display advertising is driving the way here too, despite the theat ad-blocking software and other challenges. Display video ad spend grew by 56% last year, social ads by 51% and native/content ads by 50%.
So, while the eMarketer report focuses on the US marketing scene, you can be sure the rise of display advertising is an industry-wide trend. And signs at this stage suggest the US and UK will be leading the way in taking display advertising into a new generation.
Before you get carried away, though…
Don’t go ahead and shift all your search budget over to display advertising just yet, though. These reports only tell you how much firms are spending on display advertising, nothing more. And there are plenty of challenges to overcome before display ads can really dominate the ad scene.
The first thing you need to consider is how expensive video and rich media ads are to produce, compared to search ads. This means your investment is much larger to begin with – so any firm using them will spend more on display by nature.
Next up you have the tricky notion of mobile to consider and the difficulties of creating display ads that work across multiple devices. At this stage, you’ll be looking at lost conversions due to the UX issues we’re still trying to overcome. This also pushes your display ad spend up, because you need to invest more to hit targets.
It’s not just user experience that can kill your display success rates either. Google says more than 56% of display impressions aren’t even seen, which doesn’t get you off to a very promising start. And all of this comes before you consider the challenge of ad blockers we briefly mentioned earlier.
So, yes, display spend in the UK is set to overtake search as well – but this doesn’t mean its time to down tools and devote everything to display. As always, it will be the big firms driving the way, because they can afford to take a temporary dent in their ROI for the sake of being at the cutting edge of marketing trends. If you haven’t go that kind of budget, then you’ll want to be a bit more savvy about how you increase your display spend in a sustainable way over the next few years. Display advertising – particularly video and rich media – are certainly the way to go, but how you go about them is another question entirely.