Let’s face it: banner ads have been tanking for a long time. The term “banner ad blindness” was first coined in 1998 by Jan Panero Benway and David M. Lane.
In July of ‘07,Dave Morgan blogged about a study that he conducted with AOL on ad clicking behavior.
Ninety-nine percent of Web users do not click on ads on a monthly basis. Of the 1% that do, most only click once a month. Less than two tenths of one percent click more often. That tiny percentage makes up the vast majority of banner ad clicks.
Who are these “heavy clickers”? They are predominantly female, indexing at a rate almost double the male population. They are older. They are predominantly Midwesterners, with some concentrations in Mid-Atlantic States and in New England. What kinds of content do they like to view when they are on the Web? Not surprisingly, they look at sweepstakes far more than any other kind of content. Yes, these are the same people that tend to open direct mail and love to talk to telemarketers.
Eye tracking and usability research has indicated that not only are banner ads not clicked, they’re not even noticed, a term dubbed “banner ad blindness,” so they apparently don’t even count for much in the branding department.
If a marketer determines that advertising is an integral part of their online marketing plan, and often they do, there are several formats and technologies that are capable of outperforming traditional display ads - by a lot - why aren’t more people using them? Video ads for instance. Video ads are seeing anywhere from 10 - 20X CTRs over traditional display ads. They are also demonstrating recall of up to 4X over television ads. Why? Well, look at the graphic above, when a video ad plays the viewers attention is already focused on the content that was previously occupying that space. There are also rich-media banner ads that in addition to rich media content have the feature sets that make it possible for users to share and embed content directly from the ad.
So here’s my question: why is everyone still dumping money into banner ads? I have some theories:
Old-school agencies do not understand how the web has evolved and cling to what they know
I remember when I was designing websites back pre-bubble 1.0. I started my career in the digital space, beginning with programming, leading into design and multimedia. I remember interfacing with agency designers and creative directors that all moved from print work to the internet. As a result, they were creating incredibly static, print-like websites. They were so used to their way of doing things that that they couldn’t fathom the possibilities that were now possible with the web, they weren’t excited about it.
I think the same can be said of display ads and ad placement. They aren’t taking advantage of the environment they exist in.
Marketing managers are afraid to take risks
Banner ads are accepted and safe (even though they clearly aren’t effective - WTF?) But no one is going to get fired for running a banner ad campaign. I will posit this: At this point, it is a much bigger risk to continue along the same path than it is to try something new
There is a shortage of people in the marketing world who truly understand the social web
I am willing to bet, and I’d love to know if anyone has a study, that there is a direct correlation between the decline in display ad impact and the evolution of the social web. People don’t need ads any more, they have each other. So how can brands remain relevant in this environment? I believe that there needs to be a quantum shift in thinking in terms of online marketing. Marketing and advertising are not the same thing. Advertising is a company-out model, the social web is built on a consumer-in model. They just don’t mix. Marketing needs to include everything from product development to customer service to listening to and participating in conversations. In the evolution of the web, there is a new tool set. First there was browse, then there was search, now it’s all about “do.” For a brand, that means placing your content, your people, your insights and your products at the crux of those interactions. Marketing on the social web also means giving people (customers, fans, advocates and employees) the tools that make it easy for them to become a voice for your brand online.
Clients are used to metrics and continue to cling to them (even if they totally blow)
I can’t tell you how many times I’ve been in meetings and the subject of metrics comes up. There are currently several companies who offer metrics for the social web, we are working with a couple of them. They provide a decent overall picture, but still fall short in that they aren’t able to actually get into the networks themselves and pick up on conversations, which is usually where the majority of the conversations are happening. But at least I have some nice charts and graphs to show my clients, all with numbers attached and we can measure the impact of certain activities. Admittedly, as an industry we need to do better in this area, and I’m sure technology will improve. But I also think there needs to be a shift in expectations. Marketers are so used to receiving these types of metrics from the web, being able to calculate to the penny CTR, CPA, ROI, etc. But how do you measure CTR on a billboard? Or a magazine ad? Or a press release? You can’t. And yet they are all still executed by marketers on a regular basis because it’s accepted that these are effective means of reaching people.
But still, I really don’t get it.
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June 19th, 2008 7:02 pm
I love this one Jackie. A few comments - again from the perspective of someone who spent time in the marketing world.
The most important and frustrating point is most brands have dominant logic or inertia pushing them to repeat what they’ve done in the past. I couldn’t agree more with you on your statement that “at this point, it is a much bigger risk to continue along the same path than it is to try something new”, and I’m willing to wager there are a lot of brand managers out there that agree. The problem as I see it is, for some, it is easier to do what you know. Many organizations have a use it or lose policy (speaking of budgets) so you have to spend big or your budget is gone, and budgets are one yard stick in the corporate world. Additionally, those running the organizations are the ones that understand the new models the least. Harsh truth. I think an interesting study would be to correlate the brand leadership with spend allocation or social media investment. You need decision makers that understand and EMBRACE the changing landscape at the helm. Who are the current best case examples?
June 19th, 2008 10:04 pm
Actually Nielsen Online (where I used to work) has been doing studies to measure the effectiveness of banner ads and they do actually work to some degree. Brand awareness, propensity to consider/buy tend to increase for those that have been exposed to banner ads vs. those that haven’t. FMGG seems particularly suited to this form of advertising as you don’t actually need to get the user to click through - You need them to pick that new razor off the shelf at the supermarket.
I agree that most banner advertising is a little lame but it does have it uses.
June 21st, 2008 9:26 pm
totally agree. I get the feeling that there is so much fear or so much ignorance (or both) about the potential of the web in terms of viral marketing, guerilla marketing, social media, web 2.0, that it makes no sense for banner ads UNLESS they are only to help draw attention to something specific. A banner ad on a musician’s site for a FREE download– that’s smart–though it should be an audio banner and creates the download when clicked.
Anything else is a waste of time, dollars and sense.
Stevie Wilson
July 7th, 2008 6:36 pm
I think you hit a major reason - metrics.
The problem we run into isn’t just that display ads have metrics - clients want their ads running in places with the most impressions. This may lead to the most number of clicks, but usually has the lowest click-through rate (CTR). Some clients would rather trade quality of click (or targeted audience) for shear number of clicks - even if this leads to less actual sales from the effort.
It definitely is an ongoing teaching process. Popular blogs and websites with lots of display ads certainly don’t help - sometimes monkey sees, monkey does.
July 7th, 2008 7:27 pm
I agree with most of the comments there. Indeed, banner ads are not the best advertising if you expect people to click on your banners. I have been working in affiliate marketing, and I can tell that affiliate network are not making money the creative banners of merchants!! However, it must be used for branding operations. It’s like the big commercial in the street (4mx3m), you don’t see it, but unconsciously you actually did.
July 8th, 2008 4:35 am
Yes i also agree with comments given here by others. Banner ads are loosing there position in online Advertising because people are mature enough to ignore banner ads. But somewhere i think they are still helpful if you go for relevancy. I got some satisfactory results from banner ads because i followed relevancy. And second thing which i did positioning of banner ads. These two things are very helpful to make your banner advertisement successful…………..
July 8th, 2008 11:08 am
I agree, context and relevance can help make banner ads more effective, and many agencies are taking a wide-net approach with both creative and placement. But if you think about what makes banner ads more effective; context and relevance, it also is simply against the nature of an ad to be in context and relevant to most content, that’s why I believe more strongly in other forms of marketing, and in newer forms of advertising that allow the ad to become more integrated into the content. I’m not saying ads are totally useless, I’m just saying it’s time to rethink how and why we use them, and start placing more importance on other, more effective forms of communication.
July 15th, 2008 4:02 pm
Why are there ads in Magazines? Why are there ads on the radio?
Why are there ads on Television?
July 15th, 2008 7:25 pm
Good question! It’s just clear from research and statistics that banner ads are not effective, and there are other approaches to online marketing that are more effective. My question is: why is the bulk of the money going into a tactic that is clearly not effective when there are other tactics that are more effective.
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