Fred Wilson has a great post about display advertising discussing a recent comScore white paper about the subject. Fred's bottom line:
"The basic insight from the report is that display advertising does not normally result in an immediate click. That makes sense because the ad is not being presented in a moment of purchase intent, like a search ad is. But the ad does create interest in the product or service which is realized at some later date in the form of a site visit, a search query, and possibly on online or offline purchase."
- Demand Creation Ads – these are ads that notify the consumer about a brand, it's values and reasons to purchase it (whether factual or emotional). Display ads would typically fall into this category.
- Demand Fullflilling Ads – these are ads that offer the consumer an effective shortcut to fullfiling a purchase that s/he has pretty much decided to execute. Search ads would typically fall into this category.
Demand Fullfilling Ads (DFA's?) is a fairly mature business on the web. Demand is best expressed through a search box, and search ads are an extremely effective way of fullfilling that demand. As comScore noted – the immediacy of conversion on these ads is very high, however in terms of raw volume – there aren't many of these ads.
- Interruption ads – banners, etc are intended to capture an audience consuming content and interrupt them with ads.
- Contextual ads – text ads that algorithmically emulate search advertising on non-search pages.
Contextual ads may be relevant but, they certainly are not interesting. And therefore they mostly fail at being effective demand *creation* ads. They are also not effective as being demand *fullfilment* ads because they are presented to users who have not expressed their commercial intent.