One of the most striking findings in the recent IAB/PWC Media Spend Report is that online marketing spend is shifting away from display and towards classified and search. While investment in online display – such as banner or button ads – grew by 31 per cent year-on-year to January 2007, spend on classified grew by 54 per cent, and on search by 39 per cent.
Indeed, while online display is still the second most popular form of online advertising in the UK, it looks set to be overhauled by classified in 2008, while investment in search is already three times larger than that in display (£1619 million against £592 million per annum in the UK in 2007). So are we witnessing the beginning of the end for online display?
Research and anecdotes
Some observers point out however, that the IAB/PWC figures show online display is still substantial. Sally Krumholz digital media strategist and director at Media Braintrust, says, “Percentage-wise, the main shift is an upturn in spend in classified and search against display. However, £592 million was still spent on online display advertising in the UK last year.”
Margaret Manning, CEO at Reading Room, believes there is a simple reason for the decline in B2B online display. “Display advertising by B2B companies is phenomenally ineffective. Business users have less time than consumers and are unlikely to respond to untargeted and unsophisticated messages. Display ads are an annoyance that prevent them from doing their jobs.”Yet there is plenty of anecdotal evidence to suggest that while still growing, online display is losing ground to search and classified. Guy O’Brien, head of digital at JustMedia, says, “In 2002 our online media bookings were 90 per cent driven by classic display advertising. It was the norm. Today however, this type of online advertising accounts for only 25 per cent.”
For her, the real question is not why display is slowing, but how it has managed to survive this long. She ascribes it to the fact that display advertising is easy to understand, especially for marketing directors raised in an offline world.
Barry Mills, chairman at Netstep, agrees. “Our clients are spending more on search, social and classified, and less on display this year. This is because display is lazy marketing. When times are good and people are throwing money at promotion, display does well, but when the economy is tighter, display inevitably suffers because it doesn’t work as well. This is true in all sectors, but particularly in B2B.”
Display’s downfall
To some extent we can ascribe this apparent ineffectiveness to that old favourite – banner blindness. Colin Pye, creative director of digital marketing at Rufus Leonard, comments, “If display advertising is losing its potency, a contributory factor could be banner blindness. Traditional placements – such as a banner at the top of the page or a skyscraper to the right – are more likely to be ignored by experienced surfers now.”
While this may be true, display still has its defenders, who believe it is more than a technique for those who are too lazy to try newer forms of online marketing.
Jack Wallington, programmes manager at the IAB UK, says, “Online display can be incredibly powerful. With the right creative and message, and by using some of the new technologies available such as video, marketers can really grab a user’s interest. And by using an ad network, they can get that ad in front of millions of users across thousands of sites.”
In short, display ads, if done correctly, can build brands. The fundamental problem for display is that the digital marketing industry has spent so long talking about return on investment that very few budget-holders, especially in the B2B space, are now listening to any other message.
As Chris Autry, CEO of Tailgate Technologies, says, “While, in terms of reach, display is more effective because more would see your offer than would search specifically for you, in terms of driving sales, search and classified currently score higher because you already have someone interested in your offer before they see it. Marketers are under increasing pressure to demonstrate the link between their efforts and the bottom line, so they are now opting for search, classified and other new models instead that offer clearer ROI models.”
Understanding the journey
The answer is not to make online display more focused on response. In fact, this is what has caused much of the poor online display advertising we now see. Instead, B2B marketers need to develop a more sophisticated understanding of the return they achieve from display.
Ed Cox, client services director at BLM Quantum, explains, “It’s easy to see an immediate return from classified and search marketing, but it’s a little harder to determine the effectiveness of display advertising. When deciding on business broadband for example, your typical company director will use Google and comparison sites, will see display advertising in print and online, as well as direct mail, and may eventually sign up via the call centre.”
He continues, “Determining the influence of each media touchpoint is complex. Search and classified are often the final trackable point in the purchase cycle, so it might seem they are the places to direct most of your marketing budget. But without a full appreciation of the influences on the final decision, you may be making the wrong media investments.”
Looking ahead
Online display has to change. For example, we are probably witnessing the death throes of overlay (ads that overlay text of web pages and entice viewers to see more than can typically fit in a banner ad). Geoff Gower, creative technologist at Archibald Ingall Stretton, says, “Following customer complaints about intrusive ads, media owners have restricted the time and space allowed for overlay. So we’re moving towards user-initiated, expandable advertising that provides the opportunity to create content that is just as rich as the overlay allowed, but in smaller space.”
In the short term we may see online display spend continue to slow, as marketing budgets are scrutinised further. However, this does not mean there is not a significant role for it in B2B marketing.
Gary Goodman, MD at online media trading platform MediaEquals, describes some of the drivers that will enable online display advertising to get back on track. “Video is clearly the biggest opportunity here. It gives B2B marketers the chance to explain complex product or service features in a rich, engaging way. Behavioural targeting will develop further to enable advertisers to not just follow an audience but to also follow and serve ads based on actual online behaviour. Finally, the growth of online ad exchanges will help to build more fluidity and more trade for online display.”
Be creative
As well as using the right technologies, targeting and delivery mechanisms, B2B marketers that want to build brands through display need to get the creative right. Ranzie Anthony, MD at Tonic, offers this advice. “In the B2B market where users are less focused on entertainment, there’s a great opportunity to deliver engaging content through display. However, marketers need to stop thinking about traditional broadcast messages. For online display to work you need to do much more than just replicate your press ad.”
Lastly, it is important to bear in mind that display is best used as part of an integrated online campaign. As Wayne Philbert, director at Mediacom, concludes, “Online display is effective at raising awareness and pulling users into your brand message, but in order to translate that awareness into sales, you need to integrate it with search and other forms of online marketing. There’s still a role for online display in B2B, but remember that it is just the start of the journey.”
