Making Display Advertising Like Search Advertising

Search Advertising (SEM) is one of the biggest revolutions in the digital era. When someone asks me which is the best web 2.0 company - not social company - I always answer that it is Google with its Adwords advertising platform. There is no other online product or service like this in the world. Adwords is the best web 2.0: the user is the producer and pays a lot of money to achieve their online marketing goals. And it is tremendously profitable for users, companies and agencies. Facebook is trying to stake its own territory with their Facebook Ads, but today they are still far from Google Adwords.

If you have a look into the evolution of Adwords, you can see how display advertising is permeating the platform, giving advertisers the power to buy display advertising using the same approach that they use to buy text link campaigns. Adwords, and Google with other advertising products like Doubleclick DFP, ADX, etc., are pushing display advertising to be more like search advertising. Giving all the attributes of search advertising to display advertising increases the profitability for advertisers and publishers all along the chain. There is a long way to go, but technologies like retargeting are making it possible to bring the profitability of display advertising closer to that of search advertising. The retargeting business model still has a scaling problem, but if there are no more legal issues around privacy, ad exhanges and new technologies will solve this problem in the next few years.

One of the rules I follow to see if an advertising business makes sense is to see how many successful competitors Google has in every one of their advertising products. If, for example, I take Google Analytics and try to identify competitors to see how they are doing financially, I can see that it is a tough business model. But if I do the same exercice with retargeting, I can see that there are some companies that have impressive financial results. Companies like Criteo or MyThings are succeeding under the long Google shadow, having grown like no other advertising companies in the last four years. Making display advertising work like search advertising is one of the big trends that the industry is facing after having shown that there is a big business behind it. Will Facebook, like Google, introduce retargeting capabilities into Facebook Ads?

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