Why you need to reconsider the death of the banner ad

The banner ad turned 20 in October last year. Along the way, many have praised its death countless times and others have publicly expressed their disdain.

Still, the banner ad remains the primary way for publishers to make money online and it is backed by some advertising professionals.

No doubt, the banner ad gets the blame for most of what’s wrong with the internet today: poor user experience, a lack of a solid and unitary privacy policy, intrusiveness and lagging effectiveness for display advertising.

But is it correct to blame the banner ad for everything?

 How the banner ad came to be

Wired rival websites started running ads soon after and the banner ad spread fairly quickly due to two main reasons.

First – it allowed publishers to earn revenue and support their costs fairly easy.

Second – it was very easy to implement. To display banners on your website, all you need to do is add a piece of code to your website so the ad server knows to place an ad. And it all happens automatically.

Still, what made the banner ad spread fast also lead to its downfall.

With a large number of publishers accepting banners, supply grew much faster than demand. To keep up revenue, publishers either had to put up more banners or get more visitors. This somehow led to pages overcrowded with banners.

By 1998, ad agencies caught up and became interested in the possibilites the new medium provided. Banners soon shifted from delivering utility “back to delivering what TV spots, radio spots, and print ads had delivered for years: sales messages”.

This is one of the most frequent reasons for hating the banner ad: it interrupts the user while they’re trying to enjoy a piece of content online. Often with irrelevant product or offers, thus ruining the web experience.

Still, users have learned to ignore banners as they have mostly the same rectangular shape on all sites, phenomenon known as banner blindness. There have been attempts to solve it: animations, Flash or rich media, but with no success. New formats were added, but that didn’t solve the problem: expandable ads, interstitial ads, pop-ups and pop-unders that became increasingly annoying.

With banner ads becoming increasingly annoying and increasingly ignored, performance decreased dramatically, leading a lot of people to prematurely announce the death of the banner ad.

Moreover, Google introduced search engine ads and PPC (pay per click) in 2004. Before that, the default payment method for online advertising was CPM (cost per thousand impressions), which meant that you would pay even if no one clicked your ad. Google shifted the paradigm with PPC: pay when someone clicks your ads.

Also, average CTR rates for search ads are 2%, 22x the average CTR of a display advertising campaign. For advertisers that use traditional performance metrics such as CTR and focus on direct revenue, display advertising doesn’t yield much interest. And the numbers are there to prove it. If in 2000 display ads accounted for 78% of the ad spent, by 2010 their share went down to 33% with search ads going strong at 46%.

Don’t worry, the banner ad’s not dead.

After all that, you’d say the banner ad is pretty much done.

Think twice.

Display advertising spend rose up to $51.8 billion dollars in 2014 from $42.4 in 2013 and is projected to be slightly exceed search spend in 2015, according to a forecast quoted by TechCrunch. Gradually, display is getting a larger share of digital advertising budgets, which are growing as well.

With people spending more time online and interacting with mobile devices (279 minutes spent on TV versus 456 minutes spent on desktop, smartphone and tablets combined, see here), more advertisers are looking for ways to get in front of their audience. Display offers a wide inventory and it is pretty accessible.

How to redeem the bad reputation

Advertisers spend so much time hating the banner ad that they overlook a strong point about display – the wide inventory available. Search may be king when it comes to conversion rates, but the inventory is limited. With the introduction of product listing ads, the advertising space for brands that don’t have an online store has been further limited. Also, people spend spend a lot more time browsing and engaging with websites and apps.

For advertisers who want to reach an audience, search is not enough. Display, on the other hand, offers possibilities for a wide exposure.

Another argument against display advertising is effectiveness. Display campaigns are notorious for low CTR rates. However, a lot of marketers don’t use proper conversion tracking and rely on CTR to measure performance, without taking a look at more relevant, in depth metrics such as CPA, ROI or engagement.

Moreover, for upper funnel, studies done on view through conversions have shown a lift in branded search terms and brand awareness, phenomenon known as search lift through display campaigns. For mid and lower funnel users, retargeting is a very efficient way to increase sales (cross sales or up-sales), conversions and even brand awareness. For every $1 invested in retargeting there’s a $10 return on investment, on average.

Adding to that is the fact that up until recently, marketers have used first or last click conversion attribution models exclusively. However, the path to conversion spans across multiple digital touch points that all add up. Analyzing each channel and its importance in the conversion funnel is something that digital marketers and advertisers have only recently begun to pay attention to.

Given that display is still efficient as a channel and the wide inventory, it would be foolish to say the banner ad’s the only one responsible.

First and foremost, the banner ad is a format. It represents a solution for publishers to generate revenue. In this respect, it is very similar to ads that interrupt TV shows or to double spread ads that show up in magazines. They all use the same principle: advertising space that you can charge money for.

Still, nobody blames boring, uninspiring detergent TV spots for ruining TV. Why should we blame the banner ad for ruining the web?

Whether it’s TV or online, ads needs to be creative to catch interest. Compared to user experience, apps, websites or other printed materials, the banner ad doesn’t seem to hold the same creative potential for designers, art directors or creative directors and tend to be neglected.

Conclusion

If we look at the bigger picture, the banner ad is not to blame and each advertiser could help by paying attention to what the banner ads look like.

As Joe McCambley puts it: “We’ve put the wrong things in the pixels and then we blame the pixels.” In an article for the Guardian, the creator of the banner ad also stresses the importance of experience over message. He sums it very well: the future lies in “we have to get back to asking consumers: “How can I help you?”

How can you help your customers?

2 Comments

  1. Wes

Leave a Reply

Your email address will not be published. Required fields are marked *