Online display advertising has been declining, according to Nielsen, with spending dropping 6.4% in 2008. With the advent of search, email and SEO as online marketing vehicles, display advertising has grown stale.

This current decline, however, is the result of marketers, and the occasionalInternet Marketing Company, not realizing the full potential of online display ads.

Initially, online display ads were grouped with non-online display ads. They were approached in a similar manner, where advertising is placed based on the demographic audience of the surrounding content. This method is based on broad generalizations culled from data generated the previous six months to a year taken from a small population of the actual audience.

This method is obviously very hit-or-miss and very difficult to measure based on results.

The great advantage of online advertising is its ability to generate data nearly in real time.

This data allows placement of online display ads, not based on content of website, but by user behavior. A display ad can be put on a website visited by a person based on whether the previous online activity suggests that that person is a potential customer. A few companies already offer this service and Google is offering what it calls “interest-based advertising” to expand its revenue stream beyond search.

This enhanced ability, along with ever-increasing creative possibilities, should lead to a renewed interest from marketers in online display advertising.

All in all:

Effective online advertising is finding the right mix of display, search, email and SEO for they each influence one another.