Interactive Display Ads Are Thriving, Yahoo! is Reaping the Rewards

Online advertising spending is growing every year, and companies are looking for new, innovative tactics to reach and engage their customers. For many of the heavy-hitter ad spenders, this means premium, large, and interactive display ads. With total online advertising revenue in 2010 expected to hit $19 billion (up from $10 billion in 2004), and display advertising expected to grow 7% per year, reaching consumers through the Internet is a critical part of any advertising effort.

(LCB wrote a previous post about the future of online advertising, check it out HERE!)

Online media giant Yahoo! ($YHOO) is positioning itself to be the premier platform for high-quality display advertisements, and the company’s outlook is heavily dependent on the success of this strategy. According to JP Morgan, Yahoo! leads the display ad market with a 17% share, ahead of Microsoft (11%) and AOL (7%). The company’s CEO, Carol Bartz, has stated numerous times that she believes display advertising is an integral part of the turnaround efforts at Yahoo!, and the evidence is clearly visible on the company’s homepage (www.yahoo.com).

Yahoo!

Yahoo! presents 10 billion ads every day, and advertisers want to make each impression count. To maximize the value to advertisers and consumers, Yahoo! is facilitating a shift to large, interactive ads that allow consumers to actively engage the ad. An example below is a Lean Cuisine advertisement on the Yahoo! homepage. As you can see, the slide-out ad takes up a major portion of the above-the-fold area of the page. The ad involves a three-part “quiz” that users take, selecting food preferences to determine which new Lean Cuisine product is best suited for their taste. Not only does this engage consumers, giving them a sense of control, but it provides Lean Cuisine with a wealth of data for use in future product development.

Lean Cuisine

This specific ad is highly representative of the style of ads that companies and agencies are creating to display on the site, and the platform and strategy has been lucrative for Yahoo! In their second-quarter earnings report, the company’s profits soared 51% from the year before, largely based on the success of display advertising. As the global economy continues its recovery and earnings continue to impress, companies are likely to ramp up their advertising spending. With consumers seeking more control over their purchases, agencies are delivering opportunities for consumers to be actively involved in the the ads they see, providing increased identification between brands and customers. Display advertising continues to grow as a percentage of overall online advertising spending, and for Yahoo!, this means improved revenues and continued increases in profits.

Advertisements

About Michael Dossett

Inactive since Sept. 2011

Posted on August 18, 2010, in Uncategorized and tagged , , , , . Bookmark the permalink. 9 Comments.

  1. yahoo sux. Google ftw.

  2. According to recent reports, Facebook has blown by Yahoo! in display advertising. Although they are more simple and, in my opinion, much lower quality. I believe Yahoo! can make a resurgence. It will be hard, but they can do it.

    • That’s correct, Jack. Facebook now controls 17% of the display advertising market, with Yahoo! rounding out 2nd with 11%. The market as a whole enjoyed a big drop in ad vacancies in August after they had risen the previous month.

      As for Yahoo’s future, I am inclined to agree with you. There are some extremely adept executives at the top of the company (some more than others), and they have reached their tipping point. If 2011 doesn’t show some serious turnaround, it may be time to reconsider the future potential of the company.

  3. Hasn’t Facebook overtaken Yahoo in display ad market share now?

    • Well, sort of. comScore’s numbers don’t include any of the sites in Yahoo!’s or Microsoft’s massive network, which would catapult both companies beyond Facebook’s share. For more details, see “Google Dives Head First into Display Advertising” (10/2/10)!

  4. Keep up the superb work!

  1. Pingback: Intent Targeted Advertising Threatens Viability of Portals |

  2. Pingback: Online Advertising Has Plenty of Room to Grow – Mobile, Social & Branded Content « Michael Dossett

Share Your Thoughts

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: