Advertisers to Use Banners Less?

    November 6, 2008
    Chris Crum

A report from Borrell Associates claims that next year will be the first in many in which some components of interactive advertising show little or no growth, or may even decline. A summary for the report says:

For local interactive media, the big slowdown has begun a year earlier than we anticipated. The spending levels by local advertisers – which have grown at a frenetic 47% this year – are expected to slow down to a relatively paltry 8% in 2009. Local media companies projecting double-digit and even triple-digit increases in their interactive budgets next year will have a very difficult time meeting those expectations – especially if they rely on banner ads…

 We are expecting a decline in “standard” formats – banners, pop-ups, and interactive display in general – in 2009. As new advertisers move to the Web, they are less inclined to spend their newly-shrunken ad budgets on traditional formats that they perceive to be less effective…The sparkle of banner advertising has dimmed, and advertisers are turning their attention toward newly sparkling formats that may hold greater efficiency: e-mail, paid search and streaming video.

Borrell Local Ad Spending

I will not take anything away from those formats, but I think they may be overlooking a couple of key things related to display advertising. First, Google now offers display ads as part of their AdWords Program, and secondly MySpace claims to be seeing an outstanding amount of enthusiasm toward their new MyAds platform.

"Demand for the product was immediate and significant, we’ve heard from multiple sources close to the company," says Michael Arrington from TechCrunch. "Average daily revenue, say our sources, is $140,000 – $180,000, which means MyAds is at least a $50 million/year business for MySpace already." Signs point to Display ads coming back in a big way (as I discussed here).

Both of these (and no doubt other similar formats) offer the targeted "relevancy" that the "efficient" methods like paid search and email do. There’s Google’s geo-targeting, and MySpace’s targeting based on other elements of profiles. These two are big properties that should both play key factors in this. I think the best bet for advertisers is to use combination campaigns, taking advantage of different methods, and not to forget about the branding power of display advertising.