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Has online advertising rebounded from the recession? If not, things are definitely picking up. According to the Internet Advertising Bureau and comScore, digital advertising is performing better than last year. What's more? Display advertising is starting strong. The sector hit record revenues in the first quarter of 2010.

Which leaves a question: Have display advertising's woes been unfairly tied to the recession?

It's certainly fashionable in some circles to slam the often ignored banner ad unit. But as corporate sectors begin to get their sea legs back, advertisers are putting money back into display. Perhaps more surprisingly, they're pouring dollars into the often ridiculed display inventory on Facebook's social network.

According to the Interactive Advertising Bureau and PricewaterhouseCoopers, internet advertising revenues in the U.S. hit $5.9 billion for the first quarter of 2010. That's a 7.5% increase over the first quarter of 2009.

David Silverman, PricewaterhourCoopers' Assurance partner, says:

“We are seeing continued signs of an improved economy and interactive advertising market," said  “The media industry —like the economy as a whole—saw tremendous challenges this past year, and uncertainty about the recovery remains. However, entering 2010 with such strong Q1 revenues is a sign of the health and vitality of online media, and of marketers’ continuing investment in interactive as a cornerstone of their advertising campaigns.”

In fact, many large brand advertisers increased their digital spend as they pulled back from traditional media last year. That combined with the still fledgling nature of digital advertising content means that it was shielded from some of the more brutal effects of the recession. A digital bounce back was expected to be easier as well.

But many brands do not consider display ads to be effective brand builders. If that's the case, they're certainly not showing it.

The display market bounceback has been steep this quarter, where 1.1 trillion display ads were served, according to comScore. That's a 15% increase from a year ago. It's also a new record.

Total U.S. display ad spend reached an estimated $2.7 billion in the first quarter, with the average cost per thousand impressions (CPM) equal to $2.48.

According to Jeff Hackett, comScore's senior vice president:

"Following a severe ad recession that began in late 2008 and continued through the first three quarters of 2009, we've been seeing a strong resurgence in the online display ad market. The first quarter of 2010 posted strong volume in online display ads, coinciding with increasing expenditure  from advertisers and higher CPMs for publishers. This pickup in activity should bode well for the online advertising industry as we move forward in 2010."

Also, the ongoing battle between AT&T and Verizon served the web well. AT&T was the largest display ad buyer, with 26.3 million ads served (that's 2.4% of the market). Verizon purhcased 21.9 million ads (2.0%), followed by Scottrade (1.5%), Experian (1.4%), and Sprint Nextel (0.9%).

Facebook also overtook Yahoo as the most popular display ad provider, with 176 billion display ad impressions (16.2% market share). Yahoo came in second with 132 billion impressions (12.1%), followed by Microsoft with 60 billion impressions (5.5%) and Fox Interactive Media with 53 billion impressions (4.9%).

Like every ad sector, display advertising has felt the repercussions of ad budget tightening over the past two years. Now that it looks like advertisers are putting money into display as soon as they have more money to play with, it will be interesting to see where they put their money as they get more of it as well. This could be a very good year for display advertising.

Image: SearchEngineGenie

Meghan Keane

Published 13 May, 2010 by Meghan Keane

Based in New York, Meghan Keane is US Editor of Econsultancy. You can follow her on Twitter: @keanesian.

721 more posts from this author

Comments (3)

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Adrian Swinscoe

Hi Meghan,

Thanks for the post. Whilst, I agree that ad spend rebound is a good sign that companies are coming out of hibernation following the downturn......I also wonder what the average RoI is on display ads and if it has changed over the course of the last couple of years. I suspect it may have gone down and what we might be seeing is old school traditional marketing think being applied in the digital space.....a sort of who spends the most and shouts the loudest wins mentality.

What do you think?

Adrian

over 6 years ago

Meghan Keane

Meghan Keane, US Editor at Econsultancy

Hi Adrian, I think that the increase might have to do with marketers shifting a larger percentage of their ad budgets into digital — as they cut back overall. It will be interesting to see how this progresses over the year — and whether advertisers are seeing returns on their increased investment in display.

over 6 years ago

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Kyle

This looks to be an exciting trend!  Our company provides content for Digital Display Advertising (http://www.donein60.com) so I am curious as to how the above numbers are broken down.  I've always thought of Digital Display Advertising as more of the on-location sort that ranges from digital billboards to the screens in bathrooms vs. online or rich media advertising (Facebook, Yahoo, etc.).  It seems hard to believe that $2.7 billion would solely represent the former but must obviously include the latter as well which is a much larger cross section. 

Either way you can't argue with the cost per impression!

over 6 years ago

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