As one might imagine, running a stock exchange is a fairly profitable business. Case in point: the London Stock Exchange (LSE), which earns over $100m a year in profit running one of the world's most recognizable equities markets.
Most of that profit is, of course, derived from the operations of markets and ancillary market services, such as the distribution of stock information. Yet if you go to the LSE website, you might notice that the exchange has no qualms about making a little bit extra on the side through display advertising.
Online content may be sexy, but even on the internet, turning a profit
as a publisher isn't always easy, particularly if you rely on ad revenue
to pay the bills. After all, today's advertising market has come a long
way since the 1990s.
Advertisers have a seemingly unlimited array of
advertising options, and the proliferation of ad networks and
technologies such as retargeting mean that many publishers have seen
their CPMs decline.
According to an AdAge opinion piece by Tom Hespos, who runs a digital marketing firm, advertising is failing publishers.
Will 2010 be the best year ever for interactive advertising? If the numbers released today by the IAB in conjunction with PwC for he first half of the year are any indication, this year is one for the record books.
For the first half of the year, US internet ad revenues totalled $12.1B, the best recorded number ever for the period, reflecting 11.3% growth over the same period last year.
Q2 was even rosier when broken out. Revenues of $6.2B reflect the second-highest quarterly results ever, and a near 14% increase over Q2 2009.
AOL's "startaround" plan, led by CEO Tim Armstrong, relies heavily on display advertising. Over the past year, the portal has stepped up its content creation business, invested in talent, and tried to increase the quality of its sites. All this is to attract more advertising dollars. Starting next month, the company will unveil new - and larger - ad formats, designed to draw more attention from readers.
But the question remains: Will bigger ads bring more returns for online publishers in 2010 and beyond?
That online display advertising growth so many digital marketers have been anticipating may be arriving a little early. According to a new report from Rubicon Project, digital ad spending grew 47% during the first half of the year.
That's not including search revenues — and despite an economy that has yet to nudge past the brink of rebound.
There is a lot of buzz in the digital world at present around the rise of demand side platforms and real time bidding being the future for display advertising and particularly network buying.
With all the data, technology, and bidding involved, paid search marketers could find themselves best placed to take advantage of the rising popularity.
Social media advertising may still be seen as chump change by some, but brand advertisers like what they see on Facebook. And according to the company's Chief Operating Officer Sheryl Sandberg, many large brand advertisers have increased their ad spend on the social network by 20 times or more.
If Facebook can retain — and even grow — its userbase over the next few years, the site may soon be stealing large brand contracts from larger digital publishers.
Facebook recently announced it has hit the major milestone of 500m users, following hot on the heels of the news that, in the US,
the site has overtaken Google for the first time. This is truly
remarkable growth for a site that only launched in 2004.
However, can we judge the effectiveness of Google vs Facebook based
simply on the size of their respective user bases? Should we be
diverting more budget towards Facebook at the expense of search?
Are Google's best days behind it? The company may be one of the most recognized brands on the internet, and one of the most important technology companies in the world, but Google isn't quite growing like a weed anymore.
That gives analysts and pundits plenty of ammunition to ask whether Google's future is less bright than its past. Fortune is the latest publication to promote the notion that "the search party is over" for the Mountain View search giant.
The world's largest search engine is branching out. Google has spent the last year building up its display advertising products. Considering how thoroughly Google dominates search advertising, its recent obsession with digital advertising's less profitable arm has perplexed many.
But Google thinks the $20 billion that comprises the display ad market is just a penny in the well of what it could be. Today at Google's Real Time Bidding journalist lunch, some of Google's top executives gathered to explain just why the company is investing so aggressively in display.