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Macquarie: Larger Homepage Ads Gained Momentum In Q4

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If it felt like there were a lot more of those large, homepage takeover display ads in the latter half of Q4, that’s because major sites like YouTube (NSDQ: GOOG) AOL (NYSE: AOL), Yahoo (NSDQ: YHOO) and MSN were rolling them out at an even greater pace, according to an analyst report by Macquarie analyst Ben Schachter, who plans to track placements in this format twice per quarter. In general, looking at the second part of Q4, Yahoo, which was one of the earliest sites to adopt the larger formats, had a mixed results for its takeover ad sales, while the other three had fairly solid growth for their respective oversized branding units. Overall, attempts to entice last minute holiday shoppers probably spurred retailers to pour money into takeover ads, while consumer packaged goods were less likely than other marketers to get their display ads supersized.

Perhaps it was a matter of expectations, in terms of Macquerie’s assessment of how the sites did in terms of selling the larger units. For one thing, Macquerie sees the value in the larger ads units as part of a movement to build online advertising into a more lucrative branding medium — akin to TV, newspapers and magazines — as opposed to the typical, and less remunerative, direct response ads. Over the past year, the Online Publishers Association and the Interactive Advertising Bureau have been OPA Unveils Larger Ad Units; But Can Bigger Save Display?” title=”heavily promoting”>heavily promoting the use of takeover ads for years, as a way for online to close the spending and perception gap between it and traditional media forms.

With that in mind, Yahoo’s sales were a mixed big bag at the end of Q4. On the plus side, Yahoo sold its log-in page 71 percent of days during the 2HQ4 period. On the minus side, the portal also had the lowest proportion of oversized/custom homepage ads among the four sites Macquerie looked at, though it seemed to be gaining momentum there as sales of those units comprised 36 percent, up from 32 percent in the first half of the quarter; just 12 percent of Yahoo’s Q3 ads were custom takeovers.

Yahoo also had the highest percentage of lower-quality “direct- response” focused ads (tied with MSN at 36 percent). MSN, meanwhile, appears to have been doing some catching up compared to Macquerie’s last look at its use of takeover ads in 1hQ4 — an analysis Microsoft (NSDQ: MSFT) disputed at the time. MSN demonstrated seasonal improvement, Macquerie says, as 43 percent of its sales were oversized/custom ad buys during the period were up significantly from a group low 9 percent during the first half of Q4.

AOL’s sale numbers were equal to MSN’s. Retail was AOL’s single biggest ad category, accounting for 32 percent of all homepage ads. Still, Macquerie expected a decline of 10 percent year-over-year in branded ads for AOL, though to be fair, the company is still transitioning its Project Devil takeover ads with acquisition last month of Pictela, a high-def display ad provider.

The analyst gave YouTube high marks for attracting the most diverse array of marketers to its oversize homepage ads. Although media companies made up 46 percent of the total marketers at the end of Q4, that category was 56 percent in the first half of Q410 and 65 percent in 3Q.

The takeover ads may lose some momentum in the seasonal post-holiday dip in ad spending. But as AOL rolls out Project Devil in the next few months, that could minimize the pullback in spending, especially if the ad recovery continues into the second quarter of this year. More details in the analyst note here (Sub. req.).