transformation display advertising

The Transformation of Display Advertising

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Not that long ago, Bill Cameron introduced the world to “the growing phenomenon that is the Internet.” While absurd to think about today, the introduction of the Internet and the simplification of connectivity was groundbreaking and not as well received as one would expect.

While many industries took the slow route on their journey to accepting Internet as a way of life, advertisers were some of the first to recognize the increased advertising space the Internet brought them.

The Early Days: Banners Ads

In 1993, Global Network Navigator (GNN), a project company of O’Reilly Media, realized that they could work directly with similar companies in order to promote products on their site for money – and so they became the first commercial publisher to offer display advertising in the form of direct partnerships.

Soon after offering the first advertisement to a local law firm, companies recognized that there was a new form of advertising in the making, and quickly jumped the direct partnership bandwagon, however it was HotWired which really changed the world of display advertising as we know it.

On October 27th, 1994, HotWired ran a delightfully cheese clickable ad with the simple words “Have you ever clicked your mouse right here? You will” on it and forever changed digital advertising. By setting aside dedicate space on their sites as commercial space and developing a new model based on clicks, HotWired effectively introduced the CTR model to advertisers – a move which quickly proved to be extremely profitable thanks to their reported 44% click through rate (Just a little perspective – today marketers consider anything in the double digits a unicorn).

The Growth Spurt: Ad Networks

After recognizing the potential to reach millions of users in the form of digital advertising, the idea that there should be a solution connecting the website owners with space to sell to the companies with products or services to advertise came up – and so ad networks were introduced.

In 1996, DoubleClick unveiled the first platform that did more than connect space sellers and buyers – it had the ability to track banner click through rates and impressions, giving key insight into their effectiveness while helping companies earn revenue and understand consumer behavior better. Beyond offering reporting capabilities and tracking banners, DoubleClick showed the world that advertisements are not as permanent in the new digital age. If formerly advertisers had to commit to a single campaign and run it on print ads and television, with DoubleClick, they could easily customize campaigns and change ads almost instantly, reducing wasted funds and improving segmentation and effectiveness of their campaigns.

The Rise of Google

Two guys by the names of Larry Page and Sergey Brin founded a little thing called Google in 1998, competing with the likes of AltaVista and Yahoo in the search engine space. Around that same time, Bill Gross invented the PPC model of advertising on his site GoTo.com. Recognizing that PPC was a way to monetize search engines and not just commercial sites, Google quickly sought a way to monetize their search engine and shortly after launching introduced AdWords.

Initially AdWords only offered CPM advertising, leaving them in the dust in terms of revenue when compared to GoTo (which became Overture when Yahoo purchased it for a whopping $1.63 billion). When Google revamped AdWords in 2002, they took a page from Bill Gross’ playbook and offered PPC advertising, as we know it today. Page and Brin understood that clicks played a part, but relevance to the search was what drove customer experience – suddenly companies had to pay big money to appear first, but they also had to be relevant to what the consumer was searching.

This simple understanding that consumers drive demand and not the other way around is what drives digital advertising today (and makes Google the undisputed search engine king and advertising conglomerate it is today).

The Social Media Revolution

In 2004 Facebook was launched as a platform to connect college students, yet the social network quickly took off as a platform extending beyond the confines of higher education. Just two years after foundation, on August 22nd 2006, Facebook announced the launch of their advertising module – a move that would have a profound impact on social media marketing and digital advertising as a whole.

Within a year Facebook developed the algorithms to enhance hyper segmentation based on the vast data it was able to accumulate on users, and from that point on, the only digital advertising that matters is the one that meets your exact target audience. By taking the “relevancy” criteria Google integrated with their PPC network, Facebook taught consumers and digital advertisers alike that consumers should only be shown target ads based on their specific likes and behavioral patterns. Other social media sites such as Twitter, YouTube and even Google+ quickly fell in line, quickly catapaulting the impact of social media on the world of digital advertising.

Where will digital advertising go?

 As consumers are increasingly aware of display advertisements and competition heightened by availability and easy access, companies have to improve their creative campaigns and digital strategy in order to appeal to consumers and gain the coveted clicks and conversions. To do this, many digital advertisers are turning to competitive analysis tools (such as our very own AdClarity) to gain valuable insight about competitors and leverage the results similar companies achieved in order to improve ROI and maximize customer conversion.

In the future, digital advertisers will have to continually focus on the competition while trying to balance the ever-so-delicate line between content and advertisement, as consumers want more and more relevant content that feels less and less like an advertisement.

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