Web marketers hunt濳he perfect online ad - March 1, 2007 - 0 views
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But consider this little-known fact: Internet users spend a mere 5 percent of their time actually searching. The rest of the time, they're trolling the vast expanse of Internet space, leaving marketers ever more opportunity to fill it with display ads.
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"Marketers now all have to understand the power of algorithms," she says. Today everything about a fully realized Web campaign - how the creative messages look, what color the ads are, what sites they're placed on and where on each site, what time of day they run and how frequently - is determined at least in part by software applications known as "creative optimizers."
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And every big media company is paying attention. The fact that Google doesn't (yet) dominate the market for display ads is only accelerating the arms race for faster, smarter, more efficient ways of building and deploying display ads. Yahoo, the perennial No. 2 in paid search, already brings in an estimated $1.5 billion from selling ad space mainly on its own sites, and would love to see that number surge. Analysts estimate that Time Warner's AOL unit, long the ugly stepchild of its corporate parent (which is also Business 2.0's parent), will generate $1.6 billion from display ads this year, much of that from selling ads on third-party sites. From mighty Microsoft (Charts) to a host of tiny startups, everyone is racing to build a better display ad.
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As the most visited destination on the Web, Yahoo has an estimated 131 million monthly unique visitors to its sites. By dropping cookie files onto every Web browser that calls up one of its sites, Yahoo has amassed a staggering amount of data about its users. Fayyad rides herd on the 12 terabytes of user information that flow into Yahoo's servers every day, more than the entire inventory of the Library of Congress. The data is crunched, blended with information about what people do on Yahoo's search engine, and fed into models that predict consumer behavior.
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This has led Fayyad to an important conclusion: What you do on the Web reveals far more about you than what you type into a search box.
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What you do when you aren't searching - the other 95 percent of the time you spend online - is gold to advertisers. Yahoo often sells ad space based not on a site's content but on a consumer's online behavior, a growing practice known as behavioral targeting.
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But the company also sells ad space for about 3,000 smaller sites through its Advertising.com business, which it bought in 2004 for $435 million.
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While Google has served up ads that use all sorts of images - including animated ads and, just recently, click-to-play video ads - media buyers say most of Google's display ads are short text ads similar to what you'd see beside search results.
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For now, Google is in a difficult spot. As the leading search engine, it could certainly track its users' behavior to develop super-targeting capabilities for display ads.
