Posted November 2, 2012 7:57 am by with 0 comments

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When Marissa Mayer participated in her first earnings call as Yahoo’s CEO, she was asked a very interesting question. From

During the Q&A portion of the earnings call, Mayer was asked point-blank by Cantor Fitzgerald analyst Youssef Squali: if she had to choose one, where is the bigger growth opportunity for Yahoo? Search or display?

Mayer initially indicated that search was where the money was. But as she spoke, appearing to work out her thinking in mid-answer, she seemed to step back a bit and suggest that over time, display could be the real driver as programmatic buying becomes the dominant way online ads are bought, sold and placed. Ultimately, the impact of her statement was to suggest that the company still has a lot to work out when it comes to defining its vision.

First off, let’s have a primer. What is “programmatic buying”? Essentially, it does away with the traditional negotiated IO and RFP process. An advertiser or agency would instead work directly with exchanges or Demand Side Platforms (DSPs), for example, to buy the right impression at the right time for the right price. Programmatic buying can use 1st- or 3rd-party data to make even more intelligent decisions. In a sense, this is about making display a lot more like SEM. The days of display being viewed as strictly upper-funnel are nearing an end.

Now, back to the passage above. I’m a big fan of Marissa Mayer. If anyone can give Yahoo a much-needed boost, she is the one. She’s already figured out how much work is needed when it comes to defining a Yahoo vision, something the company has lacked for a very, very long time. But I digress.

Mayer immediately deferred to “search” when asked about Yahoo’s growth opportunity. I think that’s a natural instinct given her experience with Google. What’s interesting to me is how quickly she thought about the potential for display. The channel has always been forecasted for immense growth over the next few years, but programmatic buying is really setting the pace.

Recently I was speaking with a friend who is also in the industry and works at a large direct-response advertiser. When we were discussing display opportunities, the reliance on premium buys came up. Essentially, these buys had gained a significant portion of the advertiser’s media plan over the years as the display channel grew. However, due to programmatic buying, the overall portion dedicated to premium was beginning to shrink. This dedication to the new way to buy display media was actually driving growth in the channel. Buying more intelligently was driving better results and therefore increasing investment in display.

Premium publishers are seeing this future. It’s now possible to plug direct buys into your DSP and have it play nice with your programmatic buying. Pretty soon, those premium pubs will be releasing a lot more of their inventory as 100% biddable. This is the best of a true marketplace. Lowering barriers to entry can really increase scale of activity. In the end, some win and some lose, but display’s future as an advertising channel is bright.

About the Author

Sean Nowlin is Sr. Display Media Manager at PPC Associates, a digital marketing firm based in the Bay Area and downtown Chicago. He has worked in the sales and marketing industry since 2000. Before joining PPC Associates, he spent three years running display campaigns for Progressive Insurance. Sean’s display expertise consists of managing premium publisher relationships, ad networks, Demand Side Platforms, ad verification, and Online Behavioral Advertising compliance. Sean is a Cleveland native and a die-hard Cleveland sports fan.