Banners Still Having a Banner Quarter

I was looking over the most recent online ad data from the Internet Advertising Bureau and discovered some rather interesting facts. The IAB and Price Waterhouse Coopers (who compiled the data) reported that display-related advertising spending in Q4 2008 declined by 4.3% versus the corresponding quarter a year ago. That’s not surprising in light of the horrendous economic conditions that have been affecting the online advertising industry and many others.

However, if you dig into the composition of “display-related,” you find some fascinating statistics. First, one needs to realize that the definition of display-related includes banner ads, rich media, video and sponsorships. Here are the relevant numbers:

What I find really surprising (and somewhat of a positive) here is that these data are saying that banner advertising continued to grow in Q4 and that the overall decline in display-related spending was driven exclusively by a drop in rich media and in sponsorships.

How to interpret these trends? Is it, perhaps, that the tough economy is behind these shifts, causing advertisers who are already using the Internet to shift dollars from more expensive rich media and sponsorship formats to cheaper banner ads? I think it’s very likely that that is indeed happening. It’s also possible (and I hope this isn’t just wishful thinking on my part) that advertisers are beginning to recognize that a display campaign overlaid on a search campaign can produce some valuable synergy. The results of Comscore’s research have certainly shown that this synergy exists.

It’s also interesting to see that video advertising continued to grow strongly in Q4, albeit from a small base. I think this is saying that the appeal of “sight, sound and motion” is so strong for some advertisers that they are still willing to put some incremental money against the video format even in tough economic conditions.

I’d be interested in your thoughts as to how to interpret these data.