Microsoft says no.
Google, the leader in search advertising and the company who accounted for 40% of online advertising dollars in the first six months of 2007 seems to agree. After all, if it did, why would Google pay $1.65B for YouTube (when it earned $15M in all of 2006) and then subsequently $3.1B for Doubleclick when just two years before it sold for $1.1B and was taken off the market?
Will Video and Display Ads Surpass Search Advertising?
Then again, staunch supporters of search would argue that that’s just Google looking to diversify away from its 99.9% exposure to search ads, but I think there’s more to it than that. Bear in mind, I think search will remain integral and key to all-things-digital because most people’s web experience starts with search, but search has had a fantastic growth - catapulted into prominence from 2002 to 2003 as per this breakdown, below - because small and medium sized advertisers who usually focus on a call to action and performance based campaigns saw the value of the medium.
But the truth is that while search will become an important branding tool, for all intents and purposes, global marketers and agencies are not as direct response oriented as small and medium sized businesses, and as such, search alone won’t really serve their needs. Once these large advertisers begin to shift more and more dollars away from the $285B advertising ecosystem to web advertising, it’s highly possible to think that every incremental dollar that is being spent online and not offline will see a higher proportional share being allocated to display banners and rich media, which includes video.
In fact, if you consider the historical growth of search and the TV ad market, it’s not doubtful to think that over time (10 years or so) video will be much larger than search, and display/banners will weigh in neck to neck with search ads.
For a long overview of this argument, visit our previous post here.
Will Web Ads Surpass TV Ads?
As crazy as it sounds, I think (while we’re talking crazy) that Web ads will surpass TV ads in 2021, full post here, breakdown below:
Breakdown of Online Ad Pie in 2021?
So if indeed our wild math is right, and web ads will be $85B in 2021, then I can see:
- video ads accounting for $25-30B (I know it sounds really high, but TV ads are a $75B market and TV is uber-inefficient);
- search being $20-25B,
- and display/banners being somewhere in the $20-25B range too…
- with classifieds, sponsorship etc., accounting for the difference, or $5-15B.
Sure, you might think I’m psychotic, but even the venerable folks at eMarketer peg search ads to be $16B in 2011, up from $14B in 2010… so my suggestion that search will be a $20-25B market by 2021 is very conservative. Admittedly, to suggest that video ads will become a $25-30B market sounds like I’m on crack… and since I work in the web video business by way of being a video producer/syndicator, you will think I’m biased… but I’m not, cause we also have search products and in fact currently make more money from display/banner ads…
In a Few Years, Marketers will be forced to buy TV ads if they want Online ads, too
Anyway, let me share this little bit of data: as regular readers of this blog know, I worked as VP of Ad Sales at a mid-sized online publisher from 2000-05. We took out the print magazines as well as ezines. Anyway, up to 2002 or so, the print sales teams would throw in online advertising for free… basically undercutting anthing I could offer marketers… but then, sometime in 2004, rumor crept up that the same companies (namely, Men’s Vogue and their Men.Style.com site) would force some marketers to buy print advertising if they wanted web advertising on Style.com. Here’s my ballsy, you’d think I’m drunk but it’s only 3:30pm forecast, sometime in the next few years, some TV-based media companies will force marketers to buy ad spots on their TV networks and channels if they want to advertise on their websites. Mark my words…
Web Video Ads Willbe Unrecognizable from TV Ads
I do think that video advertising won’t look like what we think it will look like, after all, if the typical TV format of programming comes in tranches of 30 minutes and 1 hour with 8 minutes and 12 minutes of advertising respectively, each ad in turn being broken down to 30 second slices, then web programming which weighs in at 1 to 5 minutes has no business being underwritten by ads that last 30 seconds, too, right?
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