Monday, October 26, 2009

Gasta Tech News:Online display advertising picks up again

David Kaplan
twitter @davidaKaplan

The tentative comeback in online display ad spending appears to be by-passing newspapers. Signs of the recovery started well enough this summer, as the NYT notes that big marketers like Mercedes began showering hundreds of thousands of dollars on dynamic, 3D display ads in newspapers.

But it was short-lived, as ad networks began getting the bulk of Mercedes’ online budget, thanks to the promise of lower costs and the promise of greater targeting. The NYT’s Stephanie Clifford finds marketers use of online newspaper ads and display networks akin to wearing expensive shoes: for a big debut, marketers will splurge on premium newspaper ads; but it when it comes to everyday business, ad networks make more sense.

The latest earnings reports bear that out. Google (NSDQ: GOOG) and Yahoo (NSDQ: YHOO), two of the biggest online ad bellwethers, saw display revenues tick up slightly. But when it came to online ad revenues at the NYTCo (NYSE: NYT), its web ads fell 18.5 percent. Gannett’s operating digital revenues were also about 20 percent lower. Meanwhile, McClatchy (NYSE: MNI) posted just a 3 percent gain for web ads.

Last spring, there was a lot of hope that the Online Publishers Association’s new display ad formats might help draw more dollars from marketers. But ad nets quickly adopted the larger formats for those who wanted them, while other advertisers have complained about the complexity attached to these buys.

So far, the only things major publishers can do to pry advertisers’ dollars is put a greater emphasis on selling the non-premium ads—which Denise Warren, SVP for advertising/chief advertising officer for the NYT Media Group, insists the company is doing to positive effect—and stress the brand building capabilities that come with being attached to a popular web destination.

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