Primary Impact

When we last reported on impression volume based on Q4 2008 and early Q1 2009 data there were some interesting trends:  Nielsen said spending on display was down 6.4% YOY (3/16/09).  The IAB had noted a decrease in interest in pricier inventory like Rich Media and Sponsorships.

Q2 ’09 data on overall media spend has been the jaw-dropping Armageddon of our worst nightmares at -15%.  But even in this horrific situation, online posed glimmers:  Nielsen reported display down 1% YOY for the first half while TNS reported it actually grew 6.5%. This of course set off another firestorm of navel gazing in the online world (“Online Ad Spending Estimates are Bogus, Some Say,” ClickZ, 9/25/09).  Media researchers know that spending data is a highly variable science (and not a science at all) in ANY medium.  In TV and print, it’s politely considered “directional” and whenever anyone hears the term “rate card value” they take it for what it is. Online is more complex to capture this kind of data for due to the number of formats and technologies involved – and the basic fact that nobody really tells what they pay for anything. It should be said, however, that there is one very simple explanation for why TNS and Nielsen numbers would be headed to the opposite ends of the street: TNS’s methodology does include deals that are performance based, Nielsen’s does not.  In a recession, there’s less demand and thus more content providers willing to sell based on performance. The IAB’s first half 2009 Ad Revenue Report noted that performance deals gained 4 share points YOY to encompass 58% of all online revenue.  TNS is dealing with a broader data set and reflects a piece of the market that has grown over the past year.

A closer look at Q2 reveals some of the very same misconceptions that contributed to the “death of display” notion that was prevalent early in the year. The IAB released Q2 online advertising spend data (which is self-reported based on top properties) on October 6.  The headlines of most pick-up, including those in MediaPost and Paid Content focused on the overall negative number. Various journalists and those in the media industry did not make it past the first paragraph.  “Online display” is typically used interchangeably with “online advertising.”  It was not online display that was down, but classified that shrunk from 14% of the online total to 10%. But once again, display, the bastard stepchild of the industry got slammed. Display actually increased its share of online revenue by 1 point (from 21 to 22% of total in Q2 YOY). Digital video also showed a 1 point share gain and search increased 3 points. If you look at the IAB data broken into component categories it shows that a 32% YOU drop in classified is responsible for the overall online spend drop. Display was stable and growing in some categories.  Craigslist can be blamed not only for destroying print newspaper revenue but for cutting into that revenue online as well.

Nielsen AdRelevance Q2 YOY numbers showed a cataclysmic drop in volume (25%) but a very strong revenue growth story (in categories like B2B, Consumer Goods and Entertainment +25, 20 and 28% respectively). When queried about how volumes in their system could have dropped so strongly when other reports were indicating stability, they noted that it was completely due to the fact that Yahoo had dropped the majority of their “compound image text ads”:  a text link with a 20 x20 pixel image associated with it that often appeared on Yahoo Mail pages.  This page clean-up process began in Q3 of 2008.  This speaks to a couple of interesting industry trends:  Yahoo still generates a ton of inventory, and when one company like this decides to alter their ad inventory strategy (reduction of clutter was a strong trend early in the year) it can impact an entire data set. When these compound text ads are taken out, the impression numbers trend much more positive: +11.7% in spend and +1.5% in impressions.

On other positive notes, by the end of Q2, even some of the greatest skeptics in the online display world issued upbeat quasi-retractions. Nick Denton, the always colorful wizard of Gawker, noted that YOY ad revenues for first half ’09 were +35% (Paid Content, July 9, 2009) and two days prior, Henry Blodget, who had been eager to dis’ display,  noted: “Hey, display ads don’t suck after all”– and he begrudgingly acknowledged that his own display-supported business wasn’t half bad.  Jaguar ads rotated with Land Rover ones on that page of content.  Paid Content reported on July 1 that women’s centric sites had 4.7 billion ad impressions in April vs. 2.2 on auto, 1.7 on travel – clearly Consumer Goods advertisers had jumped on the online bandwagon. For Google, display Q2 revenue grew 3 percent to $5.5 billion. McClatchy’s Q2 earnings report noted that online ad revenues slipped 2.9 percent, mostly due to falling help wanteds.  But, “if job ads were excluded, online ad revs would have been up 24.7 percent.” 

So much for the death of display. Come to DPAC4 on 10/27 to hear the whole story. All registrants get a free whitepaper on the State of Display2. www.dpaconference.com/agenda

Had a great time focusing on mobile over the summer. There’s so much crazy stuff in the market and decided to just report on what seemed reasonable — along with the analytics I had been doing at a mobile network. Felt like Sally Field at the Academy Awards. Never published anything where industry people emailed me telling me the work was “marvelous.” Plan to do version II for spring ‘10. Display2 is in October and then will do State of Social by end of year. The no-BS approach with many data sources and best practices is working. Go to www.primaryimpact/stateofmobile for the paper.