Scott Karp has an interesting post on his Publishing 2.0 blog today about how display advertising continues to lack relevancy over 10 years into it’s life.
Being in the display advertising business, you’d think I’d argue, but I won’t. He’s right, display advertising is still largely way too irrelevant and there is still a ton of improvement that can be done to help its relevancy. Yahoo! is taking steps in this direction with SmartAds, behavioral targeting helps, and as much as people get scared over companies having data due to privacy it’s a big key to helping ad relevancy.
But instead of really talking about what should be or could be done, I thought it’d be interesting to point out that even though display advertising on the whole isn’t very relevant today, it’s still amazingly profitable for both advertisers and publishers. Think about the opportunity here. If companies are making irrelevant ads profitable, what happens when display ads take the next steps in their evolution? Behavioral targeting will get better, the SmartAds concept of building ads on the fly based on user data, new technologies like Tailgate, and other advances should drive the profitability of display advertising through the roof for both publishers and advertisers.
People thought display advertising would die when contextual text ads started taking over the web, but instead it’s grown. Humans are visual, and seeing things can still drive a lot of response and interest when the eye doesn’t want to read a text ad. Perhaps pictures will be worth a thousand text ads after all?