Digital media ad spend has long since surpassed the combined total of ad spend on newspapers and magazines. Online ad targeting has come a long way in the past decade and continues to grow and evolve.
The Early Days
The first display ad appeared in 1994 as a banner ad for AT&T on HotWired, the first commercial web magazine:
Early advertising had limited targeting capabilities. If you were to sell flight tickets to travelers, you had to search for websites that you thought they might frequent—such as the travel section of the New York Times—and then buy advertising space on each of those sites. Although this was better than no targeting at all, it was crude at best.
The first company to provide a pay-for-placement search service, GoTo.com (later rebranded as Overture), launched in 1997. This marked the beginning of the pay-per-click (PPC) bidding system in search. After helping portals like MSN and Yahoo successfully monetize their web searches, Yahoo acquired Overture in 2003. Meanwhile, Google was strengthening its market position in search with the launch of AdWords in 2000.
Ad Targeting Grows
According to an Internet Advertising Bureau report, digital exceeded the total amount spent on broadcast and cable TV ads ($70.1 billion) for the first time in 2017.
According to PwC, 2013 was a groundbreaking year as ad search led the online advertising space at $49.1 billion in ad revenue. Display advertising was not far behind with a revenue of $33.9 billion, accounting for 29 percent of the total revenue for all categories of online advertising.
Display ad revenue has grown at a very fast rate—reaching nearly $50 billion in 2017. Such industry forecasts suggest that online advertising will continue to play a significant role in companies’ marketing efforts.
Ad Targeting in Today’s Digital World
The core reason that targeting has come so far from its initial stage is due to the massive increases in computing power. This has allowed advertisers to make decisions on which ad to show to whom within a tenth of a second. This ability, called real-time bidding, gave advertisers unmatched insight into consumer behavior. It lets travel marketers reach the right audience with targeted ads based on specific intent actions.
The combination of computing power and the ability to target individual browsers allows advertisers to customize ads shown to consumers based on things like their behavior on your site, or data from third party sources. This unprecedented access to consumer behavior and intent data has also proven to be especially valuable in prospecting. Brands now have the opportunity to attract new customers, who already look like their best existing customers, by utilizing this data.
The Future of Ad Targeting
While these approaches started in search and later came to display, they are taking over other media, like video, and mobile capabilities. With the demand for high-impact advertising, the online market is booming:
- Mobile currently counts for 63% of digital ad revenue
- Total media ad spending worldwide will rise 7.4% to $628.63 billion in 2018
- Digital media will account for 43.5% of investments in 2018
- By 2020, digital’s share of total advertising will near 50%
The industry’s progression will undoubtedly give rise to novel ways to target consumers in the digital space. With this progression, brands can more effectively reach the right audience and drive conversions.
Want to get onboard with the future of ad targeting? Contact us today.