When it comes to big spenders of online display ads, forget Procter & Gamble or General Motors: the biggest buyer is the University of Phoenix, a for-profit institution which devotes an average of $20 million monthly to online ads, mostly for display. The numbers, from TNS Media Intelligence and cited by WaPo, highlight the glacial pace of big brands shifting their ad dollars to display. Of course, search ads are another story. As Betsy Lazar, GM's executive director for corporate advertising and media operations, tells WaPo, the company buys millions of search terms. But that doesn't help content sites, which rely on display ads for support. The Interactive Advertising Bureau's figures show that search commanded 41 percent of online ad dollars last year, while display got 34 percent.
The WaPo piece identifies the usual reason for display lagging behind search: the difficulty in targeting specific demos on a particular site. In contrast, ad spending on search comes with extensive data and is therefore more comforting to marketers' demand for ROI. And while everyone expects advertisers to make the move at some pointfor example, marketing bellwether P&G has pledged to shift as much as 20 percent of its media budget in Canada to online from a mere 3 percent, indicating that wider embrace of internet ads could follow. But at present, display is having a tougher time, as TNS pointed out earlier that in Q1 the category's 8.5 percent growth was way down from last year's 16.7 percent, suggesting that the worsening economy is holding back display even more.
-- U of P and AOL: As for the University of Phoenix's big play in online ad spending, it's actually not that odd, considering that the school's parent company is the Apollo Group, which bought online ad network Aptimus last August. That purchase allowed Apollo to let its contract with AOL's (NYSE: TWX) Platform-A expire and switch its ad spending to Apitmus, depriving AOL of a major contract.
By David Kaplan