You’ve probably seen the headlines that online ad growth set another record, right? But if you look below the top line of the the IAB’s Internet ad report, you’ll see that most of that growth is coming not from the premium display advertising marketplace, but from two big biddable inventory sources: Google and Facebook.
“While total online advertising posted a solid growth rate of 15% during 2012, we can clearly see that if we strip out growth from Google and Facebook, the rest of online advertising likely grew by 3.8%,” Pivotal Research Group’s Brian Wieser said in an equity research report analyzing the IAB report. Wieser, of course, likes to loop below the top lines (generally speaking, he prefers bottom lines) to see what’s really going on. And what’s going on, is that the premium display ad market isn’t growing all that fast. In fact, that’s barely much more than the 2.4% Wieser estimates the overall ad marketplace expanded in 2012.
Wieser’s main point: As rosy as the IAB numbers may seem on the surface, they mask some systemic problems for the premium online display marketplace.
“The numbers, such as they are, include increased monetization of the long-tail with the rise of programmatic and audience-based buying, and increased use of social strategies in overall marketing activities,” he explains, adding, “Google and Facebook have proven themselves as the clear winners in this environment. Google can dominate paid search, but increasingly display advertising as well because of its leading presence in ad tech (and with YouTube, as well). Facebook is the single most important one-stop-shop for the rest of the display-based eco-system.”
And while the IAB report does not delineate the impact of real-time bidding, per se, a Gridely & Co. analysis released by the IAB indicates it’s also contributing much of the steam to the Internet’s overall ad expansion. According to the analysis, display and video RTB spending each more than doubled during 2012 to $1.948 billion and $387 million, respectively. In fact, the analysis estimates that 22% of all online video advertising, and 19% of display are now bought through RTB platforms.
“Technology and transparency leading to greater buying efficiencies for advertisers,” Gridley noted, adding, “Is RTB helping to increase the pie for digital advertising?”