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The Shifting State of Display Advertising in 2016

Display advertising is old enough to buy beer. Back in 1994, the first banner ad hit the web, and the marketing industry was forever changed. Of course, some might say it changed for the worse. The early days of the internet were plagued with pop-ups and other ads that screamed (sometimes quite literally) at consumers.

We’ve been hearing predictions about the death of display advertising for a while now. Do these predictions hold any water? With the recent explosion of ad blockers and an entire generation of people conditioned to tune out online ads, it’s a fair question. Let’s dive into the ways digital advertising has really changed in the past 21 years — and what its future holds.

Stats to Know

  • 64% of U.S. millennials believe digital ads are equally as effective as or more effective than traditional ads. (Adroit Digital)
  • Over 70% of U.S. internet users ignore online banner ads. (Goo Technologies)
  • 70% of marketers in Asia currently use display advertising, but only 44% plan to use it in five years’ time. (Warc)
  • In Poland, Argentina, and Sweden, over a third of online ads are blocked by consumers. (PageFair)
  • From 2010 to 2014, the number of monthly ad blocking tool users increased 586% to 144 million. (PageFair)
  • It’s estimated that ad blocking will cost U.S. advertisers $10.7 billion in blocked revenue during 2015. (PageFair)

All of this looks like pretty bad news for the display advertising industry. But as always, smart marketers are finding ways to adapt to the times and bring buyers digital ads that are more relevant and, to be frank, less annoying.

Predictions for Display Advertising in 2016

So what does 2016 have in store for display advertising? Let’s take a look at some trends we’ve seen in 2015 and some predictions for the future.

The use of native advertising will continue to skyrocket.

As Leighann Morris of .rising puts it, “Native ads match the form and function of the platform on which they’re hosted. Essentially, they’re ads that are part of the content.” While not all promoted content is display advertising by the strictest definition, the two certainly occupy the same spaces — and one is markedly more effective.

According to StackAdapt, native ads have an 85 to 93% higher click-through rate than traditional display ads, and marketers are taking notice. Business Insider estimates that native advertising spend will reach $7.9 billion this year and grow to an impressive $21 billion in 2018.

Video ads will reign.

As Forbes reported in September, Google has been testing video-based ads in search results — something that Bing and Yahoo have been doing since summer. It’s no surprise that the advertising giant is getting onboard the video train when Statista predicts that online video ad spend will reach $20.7 billion in 2016 — up from $15.4 billion this year.

Mobile ads will become more intuitive and less intrusive.

Michael Branch, Ad Product Sales & Strategy Lead at Pandora, talked mobile at the ad:tech conference last month. “I think click will go away and you’ll use gestures like swipe,” he said. Considering an estimated half of mobile ad clicks are accidental, this would be a welcome change. We’ve already seen more intuitive online ads in 2015 with Facebook and Instagram’s new carousel ads and Google’s attempt to eliminate “fat finger” clicks. Here’s to more of that in 2016.

What do you think?

To what extent are you thinking about display advertising as you plan your marketing budget for 2016? Will you stick to traditional banner ads? Invest in powerful retargeting technology? Amp up your video marketing strategy? Let us know in the comments.