Knowing the past, present, and future of display ads can be vitally important for anyone trying to monetize a website or app. After all, history can teach us lessons about what works, what doesn’t, and how we can evolve our advertising practices to earn more revenue.
Lessons We Can Learn from the Early Display Ads
In the early days, display ads were experimental ads run by Prodigy, an online advertising firm jointly owned by IBM and Sears. AOL followed suit, and soon many other companies followed suit. Corporations realized the immense potential with online advertising, and a new marketplace was quickly established.
However, early ads taught us a few valuable lessons about what to do and what not to do with display ads.
- New is only new for so long – Some of the early banner ads run by AOL and other companies produced click-through rates in excess of 40% or more. However, these click-through rates began dropping within a few short years, as did the advertising revenue for companies and ad companies alike. These days, banner ads that look anything like those older ads earn a fraction of a percent in terms of click-through rates. It is likely we will see a similar pattern repeat itself each time new technology and mediums spawn new forms of advertising.
- Forcing ads on users makes them mad – Pop-ups and pop-unders soon arose as a result of banner ads’ poor performance. As with banner ads, they were successful, but only for a short time. They quickly drove visitors away, and pop-up blockers appeared. This killed the pop-up industry revenue and they died out more quickly than the banner ads had.
- Algorithmic optimization is the past, present, and future of display advertising – Almost 96% of Google’s revenue comes from advertising, so advertising is certainly not dead, and it never will be. Part of the reason for the giant’s success is due to the fact that it provides a valuable search service. The other part is due to its effective auto-optimization algorithms: Google’s Quality Score measures the effectiveness of an ad, its landing page, and so forth. By creating an automated advertising exchange and optimization platform, the network helped codify what has become standard practice for the advertising industry.
The Current State of Display Ads
Today, display ads are finding their path. After a short-lived popularity spike for other forms of advertising, such as sponsored search results, we are seeing another rise in the popularity of display ads. Some projections suggest that display advertising spend will hit $19 billion by 2019.
After the downfall, why the sudden reversal? Perhaps it is because many advertisers have learned the above lessons from the early days of banner ads, pop-ups, and other ineffective techniques.
Google, for instance, is investing and earning from its own display advertising network, as are countless other ad networks. And, although algorithms and automation will always play a critical role in the world of online advertising, successful campaigns will be those that rely on the perfect balance of humans and automation.
Specialized, exclusive display ads, such as those offered by CodeFuel’s DisplayFuel, offer selective advertising to niche audiences – in this case, the software industry. For software-specific advertisers, developers, and publishers, this type of solution is ideal.
And as we progress into the future, we will see more and more niche industry networks popping up.
What the Future Holds for Display Ads
People’s eyes are inherently drawn to images, which take a split-second to process. Display advertising will rebound from the crude practices we saw in its early years, and become more and more effective as marketers continue to refine their approach.
Technology itself will also impact the way advertising operates. Here are a couple major changes we’ll see:
- New technology will introduce new ad formats – Smartphones have increased the necessity for hard-hitting, simple ads. Smartwatches will only further this trend, while headsets and VR technology may have the opposite effect. Life-sized or even larger-than-life advertisements may become a new playground for the creative in the advertising industry.
- New analytics will enhance display ad effectiveness – Google Glass and other visor technology can monitor pupil dilation and direction. This can tell Google and advertisers how long people look at an ad and how they react to it. Even if only a minority of people use such technology, the data can still be extrapolated and provide useful metrics for other campaigns.
- More competition will drive up ad quality – As the virtual world expands, so will the virtual marketplace. Competition will increase, which means that in order to be more effective, quality ads will prevail. The most successful advertisers will be those that know how to make creative use of the latest technology.
Display advertising will only become more prevalent in the years to come. And, as with any new technology, we will see explosive growth of new ads and new fads. Those display trends that thrive, however, will be curated display ads, such as those offered by premium networks such as DisplayFuel, because they provide high-quality, relevant advertising via a premium delivery network.