Digital Display Ad Investment Rises as Cost Falls

October 11, 2011

ignitionone-display-advertising-year-over-year-change-oct11.gifAdvertisers increased their investment in digital display advertising a healthy 21% during Q3 2011, compared to Q3 2010, as CPM (cost per thousand views) plummeted about 23%, according to [pdf] data released in October 2011 by IgnitionOne. The investment appears to have paid off, as digital display ad impressions shot up 58% compared to a year earlier.

IgnitionOne analysis indicates in particular, digital display advertisers increased their investment in real time bidding (RTB). CPMs on RTB display are also declining as more inventory floods the market, making it what IgnitionOne terms an increasingly more cost-effective channel for advertiser’s budgets.

IgnitionOne attributes the rise of RTB to increasing adoption by both publishers and marketers. Google’s DoubleClick Ad Exchange continued to see exceptionally strong growth, with advertising spend up 184% year-over-year.

Paid Search Spend Rises Modestly

US paid search spend grew a modest 7% year-over-year in Q3 2011 and 4% quarter-over-quarter. This compares with 6% year-over-year growth and 3.5% quarter-over-quarter growth in the same quarter last year.

Google Takes 80% of Paid Search Spend

ignition-search-share-q3-11-oct-2011.JPGMost domestic Q3 2011 search spend growth went to Google, which slightly grew to 81.6% of all search advertising spend. Spend on the combined Yahoo/Bing fell to 18.4% of search advertising spend. The alliance between the two companies has thus far had a negligible impact on their share of the search advertising market.

In Q3 2010, Yahoo and Bing collectively commanded 20% share of ad spend. Since Q1 2007, Google has consistently maintained close to 80% of paid search market share.

Retail Paid Search Spend Up, Conversion Down

Paid search advertising performance for the retail vertical was not especially rosy during Q3 2011. Retailers’ search advertising spend grew 22% year-over-year, but ROI declined as consumers cut back on spending. Conversion rates and average order values (AOV) were down 15.7% and 5.1%, respectively, for the quarter compared with the same time last year.

Kantar: Web Display Ad Spend Up 13% in H1 ’11

Within the US internet media category, display spending jumped 12.9% and search investments rose 8.6%, according to data from Kantar Media, as Kantar analysis indicates each benefited from a surge of money from the travel, local service and insurance categories.

About the Data: IgnitionOne has tracked more than 75 billion impression and more than 1.5 billion clicks on Google, Yahoo, Bing, Facebook and display networks from January 1, 2006 through September 30, 2011.

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