There’s a perfect ad for everyone

It’s been an exciting year in the display advertising business—the movement of media online and the emergence of new technologies are causing incredible growth, and we’re investing significantly to help improve display advertising for publishers, advertisers and users. But I believe we’re poised to make even greater advances in the years ahead. We’re at the beginning of a user-focused revolution, where people connect and respond to display ads in ways we’ve never seen before.

This was the subject of a keynote I gave this morning at the Interactive Advertising Bureau’s Innovation Days @ Internet Week entitled “There’s a perfect ad for everyone.” You can view the recording at google.com/watchthisspace. In the speech, I made six predictions about how display advertising will change for the better by 2015:

1. The number of display ad impressions will decrease by 25 percent per person. Today, people are bombarded by online ads, but they don’t connect with most of these ads in a meaningful way. I believe the trend will be for people to ultimately see fewer, but better ads.
2. Engagement rates across all display ads will increase by 50 percent. As ads become less cluttered, more relevant, more engaging and more attractive, we’ll see the rate at which people interact with display ads (such as watching videos or playing games) increase dramatically.
3. People will have a direct say in 25 percent of the ads they see. Whether by choosing to watch—or not watch—video ads, updating their ads preferences to customize the ads they see or actively subscribing to or choosing to receive particular ads, users will be more in control of when and how they see ads online.
4. 35 percent of campaigns will primarily use metrics beyond clicks and conversions. Technology is helping marketers measure their ads with new tools that look at factors like emotional engagement and impact on offline behavior (like in-store shopping choices). We see a longer-term future where these become the primary metrics used to measure the success of a campaign, meaning marketers will be able to deliver the ads that potential customers say they like the most.
5. 25 billion ads per day will tell people why they are seeing them. We believe it’s important to give people as much information as possible about why they see particular ads. That’s why we’ve always included an “Ads by Google” notice, and now the AdChoices logo, on ads across the Google Display Network. We strongly support the widespread use of this logo by members of the display industry and by 2015, believe that this sort of notice will become ubiquitous.
6. Over 40 percent of online Americans will name display ads as their favorite ad format. We recently conducted a survey with YouGov of more than 1,000 U.S. Internet users, asking them what ad formats they liked. The number of people who said they preferred display ads trailed slightly behind the number who liked glossy magazine ads, cinema ads and even sky-writing—formats that have been around for more than 50 years! We think this will change. Display ads provide an incredible platform to engage, excite and inspire. If we as marketers, publishers and technology providers can deliver experiences that delight the user, we can take this industry to new heights.

I believe that display advertising will eventually grow to become a $200 billion industry. If we make users our focus as I described this morning, it will put us well on track to reach that goal. I can’t wait to see a future in which the full potential of display ads is realized, providing a universally positive experience for people online and helping grow the businesses of publishers and marketers.

Posted by Neal Mohan, Vice President of Display Advertising