Online display advertising has been in the headlines lately, first with eMarketer's figures released this week illustrating that display was poised to overtake search in the near future. Then, news broke of Google's reported acquisition of Admeld, which at $400 million will be the sixth-largest deal for the company. As of yet Google has not confirmed its acquisition of the company, which provides real-time bidding ad optimization technology - but the business case for the deal is clear to all.

Google's Eye Has Been On Display

Google's head of display advertising, Neal Mohan, has been highlighting the company's desire to push deeper into display for a while. In February, for example, he said he believed that display-ad revenue could top $100 billion over the next several years. (via Wall Street Journal). As for eMarketer, its projections on search vs. display almost overshadowed its optimistic forecast for the online industry as a whole.

Search Versus Display

While search advertising still takes the greatest share of online ad dollars, it said, the steep growth in online video ad spending, combined with solid increases for banners, will help display ads eventually top search spending. This year, U.S. advertisers will spend $14.38 billion on search ads and $12.33 billion on online display, up 19.8% and 24.5%, respectively, over 2010.

Display will continue to grow at a faster pace than search throughout eMarketer's forecast period, and is on track to surpass search by 2015.

So what is fueling this shift? A number of trends:

Video. Video is clearly the most obvious reason, Michael Kelley, the CMO of AdGenesis, tells MarketingVOX, echoing eMarketer's statistics which also found that it is the fastest growing online ad category. "Advertisers know that nothing sells like sight, sound and motion. Smart phones and instant access to the Internet is also driving up more uniques and extended engagement on the web."

Better Branding. New formats are emerging where a consumer is reached when they are in the "brand consumption" mode which is not necessarily related to the "content consumption" mode, Kelley also says. "At AdGenesis, we work with publishing partners to create a service for subscribers where they give up information on their lifestyles, interests and upcoming purchase intentions in a value exchange for being matched to videos matched to their lives. We then prove they watched the video and allow the brand to activate the consumers with savings, fan acquisition programs, samples and more. We see 11% to 18% click-thru rates."

Mobile. It is a huge trend, to state the obvious, Peter Moossy, Director of Business Development for Tocquigny tells MarketingVOX. "Now as more and more viewers move online with mobile, iPads, and a general industry trends, companies feel they are able to build stronger branding campaigns through display ads."

Quality Ads. The growing quality of the online ad formats is another driver Dave Martin, SVP of Media, Ignited told the E-Commerce Times. "Whereas online historically has been perceived strictly as a direct-response medium, brand marketers are seeing bigger, better ads available to them, including :30 spots in front of Web content, that they believe can have an impact on the brand metrics that matter most to them — like awareness, intent, consideration and favorability, leading to bigger spending online by brand advertisers."

More Novel Ways in Which the Ads are Sold.  Increasingly the industry is offering more opportunities to purchase ad space on a cost-per-engagement (CPE) basis, or even a cost-per-video-completion. Other examples the growth of user choice ads, such as, to name one example, RadiumOne's R1 Like Button. This, of course, is where Admeld comes in.

If the reports of the acquisition are accurate, it will not be the first foray Google has made into this space. Last year, almost a year to the day, it acquired Invite Media, a company that has developed a system for real-time bidding on display ad space. "The game-changer in real time is that advertisers get to make much more data-rich decisions on the fly about which ads to show, as well as about which ads not to show," said Michael Rubenstein, president of AppNexus, a real-time advertising platform working with San Jose-based eBay and other advertisers. (via the Pittsburg Tribune).