Around the world, Internet advertising is experiencing significant upheaval as technologies emerge, companies consolidate and ad budgets shift. According to the UK Internet Advertising Bureau, Internet advertising expenditure in the UK broke the £2 billion barrier in 2006 thanks to a 41.2 percent surge in growth as marketers moved their budgets online. This increased the Internet's share of all advertising revenues to 11.4 percent, up from 7.8 percent in 2005.
A major reason for this overall growth is that display ad targeting has improved and is driving results that are equal to search marketing. In 2006, online display advertising, which includes banners, skyscrapers and online sponsorships, rose 35 percent year-on-year to £453.7 million.
The biggest game changer has been behavioural targeting. Rather than traditional “contextual” targeting, which makes projections about where a certain audience is likely to be browsing online, or demographic/psychographic targeting that projects the topics, goods or services they might be interested in, behavioural targeting actually tracks demonstrated preferences and actions and uses this information to target the right ads to the right people at the right time.
As in all things, knowing for sure beats a guessing game, especially when it comes to driving revenues. Better ad targeting benefits the marketer by providing significantly better ROI. It also benefits the publisher by making their ad inventory worth more and benefits the user by reducing clutter, providing a personalised online experience.
Better display advertising is changing the entire online advertising landscape. Especially when you consider that graphical ads and video make up 88 percent of all ad impressions—search just 12 percent. By making display perform as well as search for marketers, it’s opening up a market that’s potentially five times the size of the search market that Google and Yahoo! have come to dominate. It will be exciting to see how much more UK advertising budget shifts online as behavioural targeting expands its footprint in the UK.