It is easier to buy nuclear arms in the former Soviet Union than complete an online display buy.
On the other hand, buying search clicks is like buying crack: easy to get into, but hard to stop.
And like any good drug, the first hit is free. Every week as an advertiser, I receive a $100 credit in the mail from Google for search advertising. I can sign up online at no cost, and 15 minutes later my ads are live on Google. I don't have to hire an agency, I don't have to pay creative fees, I don't have to understand insertion orders, and I don't have to wait. Google offers immediate gratification with no upfront cost.
Contrast this with the average display ad campaign, which takes weeks and costs thousands in creative fees and media buying commissions. Publishers compound this problem by forcing customers to deal with salespeople, advertising agencies, insertion orders, CPM negotiations, and page view accuracy concerns, among other factors.
It should be no wonder that many advertisers, particularly small advertisers, choose the simplicity and certainty of search advertising.
We are all so conditioned to buying and selling online display ads, that we have stopped asking ourselves if the buying process is any good.
I believe it is severely flawed, and one of the major limiters of growth in online display advertising.
Why? There are five key problems:
1. It takes way too long to buy display ads. Small businesses, which are more than 17 million strong in the U.S. alone, do not waste time doing long-range strategic planning. They are focused on survival, not branding. They are looking to buy ads that bring customers into the store today -- and most display ad buys take too long to deliver this. There are a few basic self-serve ad creation tools out there, but the ads they create fall short.
2. It's too hard to try. Small businesses work with Seat-of-the-Pants-ROI. They want to see returns immediately. The $100 Google credit gives businesses enough incentive to try out online advertising without risk. It is nearly impossible to do the same thing in display.
3. Ad creation consumes too much of the media budget. The secret to success is great ads and constant optimization. Unfortunately, the average rich media ad costs $2,000-4,000 to create, so multiple ads for A/B testing would consume way too much of the overall media budget. This situation leaves advertisers with no ability to optimize, and publishers with less money getting spent on the media buy itself. We need to eliminate creative fees.
4. ROI is hard to measure. I have argued before that the efforts to create new metrics to measure advertiser success are a huge mistake. This is doubly true for small business advertisers that will only measure results in one way: short-term sales. You can claim (perhaps correctly) that they are being short-sighted, but no salesman ever got rich trying to convince customers they are wrong.
5. There's no easy way to buy. The majority of large online publishers do not have a simple, self-serve process for buying media, and the ad exchanges are too complex for the average business. This is a monumental shortcoming, as it prevents the most glorious of American traits to shine brightly through: impulsivity.
Fixing these five issues would finally allow display to finally give search a run for its money.
I have spent the last year hard at work with a small team solving one of these problems. Who is going to step up and solve the other four?