What is the future of display advertising?

Google’s director of product management Jonathan Bellack looks at the tech giant’s efforts to help online publishers generate more advertising revenue without being intimidated by the pace of change in the industry.

“For millions of online publishers—from the smallest blogger to the largest entertainment, news, e-commerce and information sites—online advertising revenue is vital. When publishers can maximize their returns, everyone benefits from more vibrant online content and websites,” says Bellack.

But the pace of change in the industry can be intimidating—how can a publisher keep up with what’s new, let alone grow their business?

Google believes that the new technology it is currently developing to make display advertising work better will help to grow the display advertising pie for all publishers, by orders of magnitude.

Bellack says, “We shouldn’t be asking how publishers can eke another 5 or 10% out of display advertising in the next few years. We should be looking at how the industry can double or triple in size.”

Google has three core ad products for publishers: AdSense, DoubleClick for Publishers and DoubleClick Ad Exchange.

But what are the key principles guiding Google’s future product innovations for increasing online ad revenues for publishers? Here’s 5 points of explanation from the Google blog.

1. Making life more efficient

For most large publishers, directly sold ads (ads sold by their own sales force) comprise the vast majority of their ad revenues. But today, selling and managing these ads is frustrating, expensive and often involves tedious manual processes.

Imagine a TV network that receives TV commercials in 100 different formats, languages, lengths and video dimensions, and then has to manually convert, translate and edit them all, then manually count the number of TV sets on which the ad appeared before sending a bill.

Things like new standards for video ad serving and systems that connect buyers and sellers are helping publishers support the most engaging and creative ads across their sites. But there are quantum leaps to come in this area, for small and large publishers.

2. Total revenue management

AdSense selects the most valuable ad for publishers from a large number of ad networks, to maximize ad revenues every time a page loads.

New ad serving and “dynamic allocation” technology, like the DoubleClick Ad Exchange, is emerging that enables ad revenues to be maximized across both directly and indirectly sold ad space, ad impression by ad impression, using real-time prices. Second by second, across millions of ad impressions, this can meaningfully boost major publishers’ revenues. Using this technology, the average price that a publisher receives for ad space sold through the Ad Exchange is more than 130 percent higher than the average price of ad space sold directly to ad networks. In fact, without this type of dynamic allocation across sales channels, a publisher’s revenues can never truly be maximized.

3. More insight and control

Our vision is to provide all publishers the smartest possible advertising system that can give them knowledge and control of everything going on with their ad business. The vision is already becoming a reality: the upgraded DoubleClick for Publishers platform offers publishers 4,000 times more data than its predecessor. And in recent years, we’ve been constantly adding new reporting options for our AdSense partners.

4. Betting on openness

An open ecosystem drives meaningful results for publishers. When a wide range of buyers can bid for a publisher’s ad space, through an advertising exchange or network, this creates more competition for that ad space, while giving publishers choice over whose ads they want to appear. On the DoubleClick Ad Exchange, an enormous number of advertisers, belonging to over 50 ad networks, compete for publishers’ ad space. Of course, at the same time, we’re also providing publishers robust technologies and controls that can block any unwanted ads or networks.

Similarly, we believe that one of the best ways to encourage innovation is to open code to the web developer community. of better, more valuable ad innovations.

5. Everything is going to be “display”

Display advertising is about much more than ads in web browsers. People are watching video, reading newspapers, magazines, books and listening to digital music at an ever-increasing rate. They’re turning to a plethora of new devices—smartphones, tablets, e-readers and even video game consoles. We’ve designed our platform, and are continuing to invest in it, to give publishers a single base that can deliver ads into this expanding world—including streaming video, mobile ad delivery and more.