The Evolution Of Digital Display

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I’ve been following John Battelle’s thinking on the future of digital display. Earlier this year he wrote a long post on the so-called ‘death of display’, the rumours of which have been greatly exaggerated. Yet whilst display on the web continues to grow (for example, at more than 10% y-o-y in the UK according to the latest IAB adspend results) there remain issues around the ability of the ‘boxes and rectangles’ model to sustain the many traditional content sites (what Battelle calls independent creators of content or ‘the independent web‘) that rely on it.

Part of the issue here is that, as I’ve written before, digital display is a game that is increasingly played at scale. So the benefactors are those that can offer significant scale through a distributed presence or through the use of data. It’s no accident that one of the largest growing areas of digital display is on social networks (i.e. Facebook) or that Google (with its distributed display ads network) is forecast by eMarketer to take the lead this year in digital display revenue in the US.

The inevitable growth in automation through real-time bidding, algorithmic trading, DSPs, SSPs, agency trading desks, ad exchanges and ad networks serves only to commoditise audiences and make it harder still for content producers to maintain yields and margins. Many are responding by trying to drive effectiveness through larger, and increasingly intrusive formats (the current vogue for commercial splash pages is a particularly annoying example) but this is no long-term solution.

Meanwhile, growth in the new generation of so-called ‘native’ ad units (promoted Tweets, Facebook promoted page posts) that appear in people’s feeds and streams inevitably serves to benefit the networks that created them more than the producers of the content that circulates within those networks.

Battelle makes the point that if we don’t find a better model for figuring out how to deliver value back to the creators of original content “we risk losing the oxygen that feeds the web ecosystem”. Perhaps. There are many potential ways of deriving value from producing content, display advertising being only one of them. But his thought about a new model that attaches value to an individual piece of content, so that that piece of content might be monetised as it is shared, and re-shared, and travels round the web is a really interesting one.

What I like about it is that it takes a distributed and destination approach to display. Most traditional forms of display advertising on content sites are based on classic destination thinking – the content producer can only make money as long as their audience are on their property (website, mobile site, app) viewing the ads. Many successful digital advertising models (Google’s Ad Sense network, ‘native’ ad formats on social networks, YouTube ads) work through smart combinations of destination and distributed thinking. This idea enables monetisation to occur not only when the reader is in situ at the original source of the content, but wherever that content gets shared to on the web. In that way, this might be considered to be a more ‘digitally-native’ model for advertising that is about weaving commercialisation of content into the fabric of the web, wherever that content might be. Not an easy model to create of-course, and one that has many potential hurdles to overcome before it might become reality but as Battelle says, it’s not impossible. If we can create automated systems that enable real-time bidding at scale around the value of individual impressions served on multiple sites, then there has to be a way.

I’m glad that Battelle used the word ‘evolution’ rather than ‘revolution’ in describing the change that he sees as inevitable, since that is what I’m sure we’ll see. But this is the most interesting idea on the future of digital display that I’ve read for some time.

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