After 2007, display ads may have been considered a declining property, but according to J.P. Morgan (JPM) analyst Imran Khan, the next year or two should be great for them.
"In 2007, we saw pretty significant influx of inventory coming from social networks sites like MySpace, Facbeook and e-Commerce sites started trying to monetize their page views. That drove tremendous amount of new inventory and as a result we saw fragmentation of audiences ... and a divergent shift from premium to remnant inventory," said Khan.
What all of that means is prices were lower for display ads over the last year. All 
the portals suffered as a result.
The demand for online advertising, especially during a presidential election year, should bear the results put forth by Khan. That, along with a lack of quality content to meet the demand, should cause a rise in better monetization over the next couple years for display ads.
Uncertainty concerning the short-term future of television over the writers strike could be another factor in the mix. With money already being returned from the networks to agencies, they are looking for a place to put it.
For advertising with graphics, J.P. Morgan thinks display CPMs will increase by 4 percent in 2008, and by 2009 reach the $10 billion mark.
"If you can improve the yield slightly there's a tremendous opportunity to increase overall revenue," Khan added.
All of this simply means we need to continue to include display ads as part of our monetization strategy. The good news is whether it's search or display, there is a growing demand for it online. That's not going to stop moving forward anytime soon.
As far as large companies go, it's possible if these projection hold out - and they probably will - Yahoo (YHOO) could see its stature enlarged again, as it's positioned itself strongly to meet the growing display advertising demand. Other portals should rebound as well.
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