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
“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.