Microsoft Rushes To Defend Display Ads; Now If Only Marketers Would Too
This story was written by David Kaplan.
As recent online ad spend reports have shown, the display business has been having a tough year. And this past weeks' market shocks suggest it's only going to get worse. Companies like AOL (NYSE: TWX), Yahoo (NSDQ: YHOO) and Microsoft (NSDQ: MSFT) having made big bets on display taking off, and the pain of display's decline could become acute. Microsoft, for one feels enough is enough, and is stepping up efforts to convince advertisers to consider display, WSJ reports. Microsoft is saying it can prove that display is a better motivator of consumer behavior than search. The company plans to present its data, which was compiled by its ad serving unit's Atlas Institute. While Microsoft has a search ad business too, it is more dependent on display sales. That said, the company says that Atlas' research began two years ago, long before it bought the ad serving firm.
-- Agencies remain resistant: Even before Wall St.'s meltdown the other day, Nielsen Online this week found a 27 percent decline in display ad spending by financial services companies drove a 6 percent year-over-year decrease in overall display dollars in the first half of 2008. The number of display impressions decreased by 9 percent during the same period. And earlier this month, JP Morgan revised its '08 US display market estimate downward to $8.2 billion from $8.6 billion or 14 percent year-over-year growth, versus its previous call for 20 percent growth. And as several ad industry execs told me this week at OMMA's conference, as the economy heads downward in general, marketers will rush to placements that are accountable. And they tend to trust search's ROI versus display.
-- Banner blindness: Furthermore, WSJ cites other skeptics who point to poor click-through rates and to "banner blindness"which means that users tend to ignore banner ads which tend to be less targeted than search ads. Still, agencies say they'll try to keep an open mind about Atlas' research, although the data is limited to sites the Microsoft unit serves, as opposed to a broader look at the display universe. "Obviously, Microsoft has a motive to shift dollars from search to display advertising because it is getting creamed in the search space," Ben Winkler, a director of interactive media at IPG's The Martin Agency, tells WSJ. "But this does help us get a much better picture of how our online advertising is working."
By David Kaplan