Signals That May Lead To Online's Next $25 Billion

David Zinman of Yahoo Inc.

Emotionally dynamic ads that invite consumers to engage with brands through behavioral targeting are one important development driving growth for the advertising industry, Dave Zinman, VP and GM of display advertising at Yahoo, told attendees at OMMA Behavioral on Thursday in San Francisco. And it's a signal that should be heeded.

Zinman started with the lessons of the past, sharing what he sees as historically correct and incorrect signals to provide insight on how online advertising could double from its current $25 billion to $50 billion as an industry. He admitted that it is difficult to read the signals, even in hindsight, and there's no magic crystal ball -- but it's important to filter out the conflicting noise to find the nuggets.

Take, for example, the incorrect signals that emerged in 1999. They included the 55.8% of people accessing AOL through dial-up, because people didn't take into consideration the 2% going through cable, Zinman says. It also was difficult to see that while the U.S. had 90 million online users, China would become a powerhouse.

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A handful of correct signals that surfaced in 2007 were the portals that got into the "ad network game in a big way," Zinman says. Google bought DoubleClick. Yahoo bought Right Media and BlueLithium. The wealth of data that Yahoo gained and the depth of understanding of users has been transforming, he says. It seemed clear at the time that the portals would transform the network business.

Search has been the growth engine for the first $25 billion for online advertising, and it will continue to provide a boost, but there are signals in display advertising that have been ignored. Display will allow the ad industry to get to the next $25 billion, Zinman says.

In search ads, it's all about the click. In display ads, the click should not have that much weight. "We need to focus on the value of the impressions," Zinman says, making a point by conducting a 16-second recall test, where he flashed several text ad questions on the screen and asked conference attendees to respond with the correct answers to questions about the ads. "Why 16 seconds? That's the average time people spend engaged with a rich media ad unit."

The industry continues to evolve. Yahoo, Lycos and MSN were among the top publishing sites in 1998, but then the ad networks emerged. So, the industry built exchanges to aggregate ads. Now, the industry will see a new set of tools and demand side platforms, Zinman says. Ad networks will need these tools to manage bids, but will also expect to see them associated with behavioral targeting for dynamic ads, he says.

Dynamic ads will drive scale. HP recently ran a display ad campaign on Yahoo properties that reached more than 140 million uniques. Performance results registered on par with search, racking up about 20.5-times better performance than historical display.

Demonstrating a handful of creative ads that ran on Yahoo, Zinman says these advertisements are an invitation to the consumer to engage with the brand. "The signals we need to take in emotionally engaging creatives are powerful for advertisers," he says. "We need to invest in video and those things.... Clearly it's a signal we need to hear."

1 comment about "Signals That May Lead To Online's Next $25 Billion".
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  1. Pooky Amsterdam from PookyMedia, August 1, 2009 at 1:34 p.m.

    "...... emotionally engaging creatives are powerful for advertisers,.....need to invest in video and those things.... Clearly it's a signal we need to hear." I couldn't agree more, as time is the new currency, getting people to engage with your brand in a meaningful way is the cornerstone of sales. And saving 90% of cost is the answer with the use of high concept, high quality and targeted content, key. http://bit.ly/SjCcT

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