comScore’s Gian Fulgoni breaks down what was actually taken into consideration for "display-related" ads. This includes banner ads, rich media, video, and sponsorships. Take a look at comScore’s chart:

So by these numbers, banner ads actually increased by 8% in a year’s time, and videos grew an astonishing 74%. Of course there is nowhere near the amount of money being spent on videos as there are for banner ads.

"Is it, perhaps, that the tough economy is behind these shifts, causing advertisers who are already using the Internet to shift dollars from more expensive rich media and sponsorship formats to cheaper banner ads?" asks Fulgoni. "I think it’s very likely that that is indeed happening. It’s also possible (and I hope this isn’t just wishful thinking on my part) that advertisers are beginning to recognize that a display campaign overlaid on a search campaign can produce some valuable synergy. The results of comScore’s research have certainly shown that this synergy exists."

Interesting point. That reminds me of an article I wrote last year on that very subject. The bottom line is that you have to stick with what advertising methods work for your business. Experimenting is certainly encouraged, but that’s why there’s testing. Figure out what works, and build upon it. You are likely to find that a combination of different methods will work together nicely.

They used eye-tracking software to determine the circumstances for when online ads were actually seen by participants. Highlights of the study include:

- Within a half hour, magazines effectively delivered more than twice the number of ad impressions as TV and more than 6 times those delivered online

- Though TV doesn’t deliver as many ads per half hour as do magazines, net recall of TV ads was almost twice that of magazine ads; magazines in turn had ad recall almost three times that of Internet banner ads

- 85% of Internet ads served appeared on-screen and could be identified by brand

- Among web users, 63% of banner ads were not seen. Respondents’ eyes passed over 37% of the Internet ads and stopped on slightly less than a third

- For Internet ads, almost all net recall could be attributed to ads that were seen

- Internet video ads appeared much less frequently than banner ads, and their exposure skewed heavily towards young men. When they did appear they were twice as likely to be seen as banner ads.

"Our findings indicate that we need to learn more about how to engage Internet users with advertising content," said Rebecca McPheters, CEO of McPheters & Company.

This week Google launched some new templates for rich media and video display ads. Advertisers using paid search might want to consider looking into something like that.

In fact those Google ads even have some analytical advantage. They let you place various products with unique landing pages within one ad. You can then examine which ones are performing the best and make necessary adjustments to your campaign.

Why Not Use Both?

Perhaps you should consider using a combination of the two to truly get the most out of you campaign. There is a common belief that search engine advertising delivers a better return-on-investment, but according to Matt Lillig of the Yahoo Analytics Team, a combination is more likely to do so. He says that advertisers just aren’t measuring display ads in the best fashion. He writes on the Yahoo Search Marketing Blog:

Specifically, many advertisers primarily use conversion percentage to measure the success of their display ads and search keywords. For example, if a display ad converts poorly (it has a low conversion percentage) then the advertiser typically lowers the budget for the ad, shifts the budget to another channel like search, or pulls the budget entirely.

The problem with only using the conversion metric method is that it is a “last click” metric. “Last click” means that the ad only gets credit for the last click the visitor made before they converted. For display ad and search keyword purposes, a last-click model doesn’t reveal the true value of the ad. For example, a display or search ad wouldn’t get the credit for driving conversions to other campaigns. This can be a major issue, as advertisers might end up cutting the budget on an effective display campaign that is driving additional conversions, brand awareness and increased visitor traffic to your web site.

He then goes on to discuss the "assist" metric in Yahoo Full Analytics, which measures the number of times that display ads or search keywords contribute to the conversion of another ad or keyword.

Things Have Changed

There is no question that Pay-Per-Click search engine advertising has gained tremendous popularity over the years with the rise of the services mentioned in the introductory paragraph. In their early stages, they appeared to be a fresh alternative to banner ads that seemed to be attracting less and less attention. Perhaps more importantly, they brought a relevancy to ads that was not really present in older display ad campaigns.

The fact that they were based on searches assured a targeted audience that was more likely to be interested in the products being advertised. This concept was and continues to be a very attractive one to advertisers.

However, display advertising platforms are now offering such a concept, which combines not only relevancy and targeting, but the branding power of eye-catching visuals. In addition, platforms like the Google AdWords Display Ad Builder, MySpace’s MyAds, and others allow the advertisers themselves to easily create professional looking ads without having to go through designers or ad agencies.

And let’s not forget the well-targeted method of email advertising, which happens to be the preferred method of small businesses for the holidays according to Constant Contact.

Tips

If I start getting into a whole lot of tips, this article could easily turn into a book, so I’d rather send you to a couple of resources covering both search engine advertising and display advertising, but first I will offer a couple extra nuggets:

- If you’re using personalization tactics, do what you can not to insult potential customers (see the muffin-top fiasco).

– Second, think about your call-to-action. Would you click your ad? What would it take to make you want to do so? Think about Google’s advice with the Google Checkout Icon. 

If you’re familiar with the search industry, you’re no doubt familiar with SEOBook and it’s author Aaron Wall. He’s got a very nice document (PDF) on AdWords and Yahoo PPC tips, and Jamie Lomas at iMedia Connection has some good ones for display advertising. Read these and get some wheels turning. Think about combo-campaigns and let your search ads and display ads compliment each other. You’ve got an ROI to think about.

An important thing to note about this move is that while the classic text style of AdWords may inspire clicks, it lacks the branding power that can accompany a well-made display ad. The reason for this is that imagery can help an ad stand out and stick in the memory even if it is not clicked on. Text-style AdWords ads tend to all look the same and not have any visual branding value. There has been an argument throughout the years that people are blind to banner (or display) advertising, but could the same not be said for AdWords?

Data from a recent study by iPerceptions suggests that text ads get more clicks than display ads. This may be true, but relevancy has always been the drawing factor when it comes to AdWords. Google has been able to serve ads with relevant keywords through the service, and should be able to do the same with the new display ads. This will probably  encourage clicks that may not have always been so likely with display ads in the past.

Google intends to continue adding templates and features to the display adverting tool in AdWords, so it should only become increasingly enticing for advertisers to use, particularly ones that aren’t design-savvy and are unable to hire designers. Currently the service allows for images, flash, and video. It looks like display advertising is getting the love it deserves these days.

Here’s why: The whole system of Internet Marketing profits is based on effort and engagement.

Witness-

Web advertising (text links, banner ads, Adsense) has a back-of-napkin payout of about 1-10% against your time and resorces.

Comparatively, CPA (cost per action) marketing where you’re rewarded on leads taking an action (filling in a form, submitting an email address or zip code) pays about 5% to 30% return on your effort.

Affiliate marketing with payouts on completed transactions gives a payout of 10% to 90% (depending on whether it’s a physical product or digital one).

And the big kahuna is product creation with payouts of 20% to 100%, and you control the highway toll booth so to speak.

The higher payouts are proportional to customer engagement, and your efforts to profile and understand them.

With that equation clearly in mind, why would you choose to focus on lower levels of engagement with a limit to your time and resources?

I understand the often heard sentiment from new marketers to start out with “something easy”.

It’s good to wade in baby pool at the beginning of the journey, but choosing to stay in there for long periods of time, even when people have graduated to blue oceans is beyond me.

And just in case, you’re wondering about the guy who operates 1,000 blogs running adsense on them. I think the branding associated with being a super affiliate or owning your own product, far outstrips the guy with 10,000 made-for-Adsense blogs.

That’s my personal view.

The key is to have a game plan when starting out, and following the plan.

Your comfort zone and your mindset will set the pace for your eventual success in this field.

Comments

Text advertising still gets attention, as evidenced by ClickZ’s reference to a Nielsen Norman Group study on the topic. (Nielsen as in usability guru Jakob Nielsen, not the ratings service Google has on schedule to crush in the future.) Graphical ads haven’t been noticed nearly as well.

Google’s twelve-digit market capitalization may have been a hint too. Or the popularity of the Adblock extension in Firefox. Or Opera’s new content blocker.

Internet users have been focusing more on the content and less on the ads, if at all. Banner ads get no love from those users. ClickZ cited Nielsen Norman Group research director Kara Pernice Coyne, who said text and contrasting colors in a graphical ad kept simple is less likely to be disregarded.

The Internet Advertising Bureau dismissed the study out of hand:

Stuart also cited the cost effectiveness of online advertising. He didn’t mention another aspect of it that give online ads an edge over their big media commercial counterparts; online advertising can be measured to see just how effective it is for the marketer.

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David Utter is a staff writer for WebProNews covering technology and business.