If search was World War I, we are cur­rently in the mid­dle stages of World War II in dis­play and a sim­i­lar pat­tern is emerg­ing. Yahoo! was once the mar­ket leader in search and today, Yahoo!’s search is pow­ered by Bing.  As a result, Yahoo! has con­tin­ued to lose search mar­ket share through 2010 (see fig­ure 1).

Fig­ure 1: EF Q3 State of the Mar­ket Report

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In dis­play, where con­tent is king, ini­tially Yahoo! had a clear head start over Google. It owns some of the most traf­ficked and highly sort after con­tent on the Inter­net. It has a long his­tory oper­at­ing in the dis­play mar­ket­place and under­stand­ing adver­tis­ers’ mind­sets as it relates to that chan­nel. It even first acquired a stake in a ded­i­cated dis­play exchange with the Right Media acqui­si­tion a few months prior to Google’s acqui­si­tion of Dou­bleClick largely for a sim­i­lar purpose.

How­ever, despite all these advan­tages, in 2010, adver­tiser spend trends are fol­low­ing what hap­pened in search. Google via the Dou­bleClick Ad Exchange (now largely merged with the Google Con­tent net­work to form the Google Dis­play Net­work), has pro­vided adver­tis­ers, agen­cies and ven­dor part­ners alike with a far more straight­for­ward adver­tis­ing plat­form to attract ever more of the bid­d­a­ble (aka. Tier 2 or Non Pre­mium) dis­play ad dollars.

Google’s plat­form incor­po­rat­ing many of the suc­cess­ful fea­tures of their AdWords plat­form for search has in par­tic­u­lar allowed mar­keters who have never oper­ated in the dis­play ecosys­tem to much more eas­ily begin cam­paigns on the chan­nel. This includes the large spend­ing direct response mar­keters who pre­vi­ously lim­ited them­selves to chan­nels like search, email and affil­i­ate marketing.

In 2010, accord­ing to Effi­cient Fron­tier client trends in the U.S .(fig­ure 2 below), Google’s AdX has attracted more adver­tiser dol­lars as the year has pro­gressed. In Q4 thus far, this has rep­re­sented about 70% of adver­tis­ers’ dis­play media spend out­lay. One point that should be noted is that Yahoo, which makes up a large por­tion of the RMX inven­tory, put less of their owned and oper­ated prop­er­ties’ inven­tory on the Exchange.

Fig­ure 2: EF US Client Dis­play Pro­por­tional Spend 2010

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Looks like his­tory is begin­ning to repeat itself.

Chris Jacob

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