Display advertising makes a comeback with new Google backing

Google is investing in new technology that will tailor make display ads for individual users

Google’s rivals have struggled to compete against the search king when it comes to the search advertising marketing.

The giant has relentlessly implemented new technologies to ensure the effectiveness of its search advertising over the years to ensure its position as market leader – and it still commands a massive 65% share.  

It has added weight to this with a stream of improvements each quarter designed to boost the monetisation of search results, increasing the click-through rate and ROI for advertisers, as well as Google’s own profits.

It is now on the war path of display advertising, as today’s news that it has bought Teracent, a private company whose technology is used to customise and target display ads, suggests.

Google’s acquisition is a warning to search rival Yahoo that the pace of innovation in the digital advertising market is picking up – post GFC.

Internet advertising is now worth £1.75 billion a year in the UK, which display advertising accounting for 18.1% (or £316.5m).

Most ad targeting on the internet tries to select the best advert to send to a particular user after making an estimate of things like his or her tastes, age and location. Teracent aims to go one better and has developed technology that designs what it thinks will be the best version of an ad to send to each individual user.

Advertisers who use the service basically hand over a collection of advertising elements to Teracent, which then combines and recombines them to reach what it believes will be the optimum result.

Its algorithms rely on machine learning: the more versions of an advert that are shown, the better it understands which will work best in each set of circumstances.

Targeted advertising is again rearing its head. It’s been touted by marketers as the next generation in marketing for years. The mobile advertising platform has given the idea further weight, but as far as we can see, no one has quite mastered individually ‘targeted’ advertising yet.

Will this new Google acquisition be the beginning of a beautiful relationship between consumers and ads?

It certainly sounds like it could change the way we see display advertising, but response rates are low (0.25% ) and that most consumers simply ignore display ads or are immune to them.

Could display advertising make a comeback if it has the backing of such a giant as Google?

We’d love to know what you think…