Online Advertising Is Hot…. Why?
BusinessWeek has a great article on Why Online Advertising Is Hot Right Now
Google recently acquired Doubleclick for $3.1 Billion. Google is the leading provider in contextual advertising. Doubleclick is one of the leading providers of display advertising. Put the two together, and you really have something.
Business week says that the market for display ads will be approximately $5 Billion this year. However the market for contextual advertising is $8.4 billion this year. Given that pictures naturally carry more emotion and information to a person than text (think Television vs Radio), why is it that display ads have a smaller piece of the pie? After all, in 2000 display ads brought in 40 time as much money as text ads.
The reason that text ads make so much more money than display ads is that companies such as Google have done a great job of targeted the ads to the individual consumer. The text ads has thus started to convert better, leading to the text ads commanding a higher price.
So if you combine Google, which has learned how to target its text ads to each web surfer in order to maximize the conversion rate, with Doubleclick, which is the largest player in a huge market, you have the potential for enormous growth.
What does this mean for you as a webmaster? You might want to look into displaying Google’s display ads on your site. Give them a run, see how they convert.