July 12, 2010, 4:47 PM ET
Internet advertising could be moving beyond the search ads that have dominated the industry for the past few years. But could these ads become something that consumers actually don’t mind seeing?
Technology companies are working to persuade Web advertisers to think more creatively, the Journal’s Jessica Vascellaro reported Monday. And “display” ads — those that involve graphics — will see rapid growth over the next five years, say PiperJaffray analysts.
In a report released this month, PiperJaffray’s Gene Munster says display ads will grow more quickly than search, nearly doubling from 2009 figures to become a $15.7 billion market in 2014. The reasons for the jump? New abilities to target audiences, and better ads in videos, mobile Web pages and the like.
Advertisers are increasingly targeting their ads to consumers’ online behavior. The theory, of course, is that consumers will be more interested in seeing ads that are tailored to their interests. It has worked for search advertising, which has traditionally given results tied to a specific search, and now it can be applied even when the user isn’t conducting searches.
Targeting already “has become the most important ability” for an ad provider online, Mr. Munster writes. And advertisers report that more people interact with these targeted ads — meaning that they could be more valuable.
In addition to making ads more relevant, online ad companies are hoping to make them more entertaining — or at least attention-grabbing. Consumers have become “‘desensitized’ to typical banner advertisements,” Mr. Munster writes. He says Yahoo has had success with ads with “elements that pop out at consumers beyond the standard banner box” and expects to see more ads in the future that incorporate interactive games. Google CEO Eric Schmidt touted ads that are like mini-webpages and incorporate video and the ability to interact with the ad.
The other changes that Mr. Munster says will drive an increase in display ads are the moves to online video and to mobile devices.
Ads in videos likely won’t seem too new to viewers accustomed to TV ads and product placement, although they could be more interactive.
Mobile ads, though, are another story. Apple is betting that its new iAd platform will drive mobile advertisements that users are eager to click on — a big change from mobile banner ads. For some users, the spots are like Super Bowl commercials, enticing people to buy apps just to see the ad. App developers are indeed reporting higher click-through rates with the ads, although much of that could be because of the hype surrounding Apple’s effort.
Readers, what do you think? Do you pay much attention to online ads, and have you seen any that you actually find entertaining or useful? Do you notice or like ads that are targeted to your behavior?