One Year Ago Today In Digital Display Advertising...

Because online display advertising is a business that often ignores its history, I want you to take a look at Henry Blodget's prediction of doom posted almost exactly one year ago, on October 20, 2008:

It's time we woke up and faced reality. Online display-ad spending will fall in 2009, probably sharply. It will probably fall again in 2010. Hundreds of startups counting on advertising as a business model will be flattened. Yahoo, CNET, AOL, and other big display-ad properties will  get hammered. Legions of me-too video sites will croak.  Ad networks, the "hey, let's just start an Internet company!" flavor of this second dotcom boom, will get decimated.

Long story short, yes, display advertising was slightly down in 2009.  But I don't agree with Henry's gloomy prediction about 2010, and neither does PWC.

What did Henry get right?  The ugly economy.

I think display advertising will go up in 2010 slightly and begin to climb at a steady rate.  This time, technology and economics will be the growth drivers.

Sure the economy sucks, but companies always need to advertise. A different Henry - Henry Ford - was right when he said "The man who stops advertising to save money is like a man who stops a clock to save time."

Serving this permanent need is digital display - a low cost-option in the world of mass media. So while some companies cut back ad spend - budgets will also get shifted.

The second driver is technology. Banner ads are going to become intelligent dynamic ads that are going to no longer resemble the print model that got transplanted online. I hate to use a consulting-ish term like "Advertising 3.0" - but things are changing in that direction.

AdBean - and others in the technology space - are making display advertising more accessible to more companies.  We provide self-service simplifications of workflow and administration that used to be a huge barrier to creating and running display campaigns.  Companies like Adify are making it easy to target. Ad exchanges like AdBrite are providing real-time access to thousands of publishers.  User intent -- the magic bullet of the search advertising world -- is now available in display from companies like Openamplify and BlueKai.

Finally, the display advertising medium will grow because it has to: too many companies are relying on this medium becoming more successful. Agencies, publishers, Yahoo, Facebook, need the medium to be more successful that what it has been.  They can't start a search engine - so helping people make money through display is their next best option. Any time you get that much momentum from a community this large - there will be some breakthroughs that greatly improve performance.

If as an industry we could finally start driving towards other metrics beyond clicks and CPM..well, I can dream.  Those are posts for another day.