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Banner Advertising--Is It Really A Failure?

By regeya in Op-Ed
Sat Apr 21, 2001 at 10:39:39 AM EST
Tags: Internet (all tags)
Internet

A few years back, once the Internet suddenly became a thing accessible by the common man or woman, and the hypertext went from being an interesting theory to the World Wide Web, companies looked to the new medium with something resembling morbid fascination. It quickly became evident that here was a medium that made it possible for a user to interact, to dig, and to click through mounds of information in the name of research and entertainment. Web content quickly became something with a narrow focus, something for someone with specific interest.

This was about the time that advertisers got interested, and decided to throw caution, and common sense, to the wind.


You've probably all seen the articles. I won't bore you by linking to one, then. Industry analysts, expounding on the virtues of Internet advertising with something resembling orgasmic glee. Finally, they reasoned, a way of reaching a narrow target market, and a way to get instantaneous results on the effectiveness of their advertising. Thus the banner ad boom was born.

And, based on that analysis, banner advertising has been a dismal failure.

The reasoning goes something like this: banner ads were great for the reasons listed above, and the way to get instantaneous results was to measure the click-through rate, or the percentage of clicks on a banner ad based on the number of impressions. It was easier to measure effectiveness of an advertising medium than ever before. Companies advertise everything from cars, toothbrushes, and computers to vacations, low-interest loans and online casinos. And oh yes, they forged bravely into a New World of advertising.

Funny how things didn't work out quite like they expected.

I'm also sure you've seen several recent articles on the subject, so again I won't bother linking to them, because they're almost all the same. Banner ads are a dismal failure, the pundits cry. Clickthrough is dismally low overall. The overall rate is less than 1%. That's a harsh number and a harsh reality to deal with. Based solely on click-through, banner ads really are a dismal failure.

But then again, who said click-through was the most effective way of analyzing the effectiveness of online advertising?

I happened upon a study that suggests that that is not the case. The study done by About Millward Brown Interactive in 1997, known as the IAB Advertising Effectiveness Study (or take a look at the full report in PDF format), uses more traditional methods of studying Internet advertising effectiveness. Rather than studying click-through, the study evaluated Internet advertising effectiveness based on studying a group of Internet-using consumers. Their summary was surprising. Among the points made in the summary (please refer to the executive summary for more details:

-Consumer acceptance of online advertising is comparable to that of traditional media.
-Online Advertising dramatically increases advertisement awareness after only one exposure.
-Click-throughs are not necessary for impactful brand communication; in fact, click-throughs don't add very much.
-Online advertising is more likely to be noticed than television advertising. (!)

and the closing paragraph reads:

Given that the Web's advertising power is just beginning to be understood, any advertiser looking to build their brand and increase their sales should utilize online advertising alongside traditional media to ensure their future success.

Granted, this study dates back to 1997, which may make some of the data a bit dated, but it's hard to ignore some of the data. For instance, that in the study group, 43% of the group retained awareness of particular ads. Contrast that with the click-through rate of only 4%

What does all this suggest? I submit that, rather than suggesting that Internet advertising is a dismal failure, that further, extensive study is needed. For instance, how important is placement on a page? How important is frequency? What is an effective approach to banner advertisement? What is the current retention rate of banner-ad messages? My suspicion is that banner advertising may yet become an important part of an advertiser's media mix, taking a significant chunk of "traditional" advertising media business for the purposes of building brand awareness, improving brand image, and the functions performed by traditional advertising. If the naysayers are truly interested in evaluating banner advertising, perhaps they should evaluate advertising using traditional methods rather than treating banner ads as if it were simply a direct marketing tool.

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Banner Advertising--Is It Really A Failure? | 14 comments (13 topical, 1 editorial, 0 hidden)
Disappearing ads (3.50 / 2) (#2)
by alprazolam on Fri Apr 20, 2001 at 05:04:50 PM EST

I would like them to appear, get their message across, and then either disappear, or remain static. As opposed to blinking annoyingly for 10 minutes.

$EDITOR /etc/junkbuster/blockfile (none / 0) (#3)
by evvk on Fri Apr 20, 2001 at 05:11:31 PM EST

Makes them disappear, doesn't it?-)


[ Parent ]
Yes! (none / 0) (#6)
by Parity on Fri Apr 20, 2001 at 05:53:19 PM EST

IBM has some beautiful adds like this... They run an animation just twice, and then stop, becoming a static ads. They show up a lot in the sidebar ads on the news sites that are playing with placement. It is -such- a relief to the eyes to -not- have to filter out the constant flicker, that I actually reloaded the page just to make sure I wasn't imagining the behaviour, and paid -very- close attention to the ad. ;)
(Of course, that's 'being different' factor, and if everyone adopts this behaviour then you'd have to do something else to be different, but that's life in the advertising fast-lane.)

Anyway, I want more ads like that, and less of the ones that FLASH ON off ON off, go RED, go BLACK, go back to flashing again... ack. I'm getting a headache just remembering them.

Parity Odd


[ Parent ]
Some browsers support that (none / 0) (#9)
by Eimi on Fri Apr 20, 2001 at 08:42:51 PM EST

Recent versions of Mozilla will let you do that, by setting an obscure variable (can't remember what). In Galeon (which has recently become my browser of choice for quite a few reasons) it's as simple as going to the Settings menu and choosing Animate Images/Once through.

[ Parent ]
I'm inclined to agree (4.40 / 5) (#4)
by nurglich on Fri Apr 20, 2001 at 05:16:32 PM EST

Really, I can't imagine even TV ads have a "click-through" rate all that high either. How many people actually call their Honda dealer or doctor right away when they see a commercial on TV, as the ads recommend? Very few, I'm sure. Still, TV ads are seen as succesful, and command a large amount of money.

In fact, the main failure I've seen in banner ads isn't their sheer effectiveness to advertise a product, as their inability to pay ad hosters well, as the ad networks don't seem to believe they have any usefulness. Hopefully, this attitude will change so we don't end up with an Internet that charges for every damn thing you do. Just like TV, "pay-per-view" and "premium channels" will always exist on the Internet, but as long as advertising rates improve, the bulk of it can stay free.

And really, I only dislike the big popups. Little banners never bothered me, and extra windows are easy to close. As long as its paying for me to use the Internet, I can deal with an ad now and then.

------------------------------------------
"There are no bad guys or innocent guys. There's just a bunch of guys!" --Ben Stiller, Zero Effect

I've said this before (4.25 / 4) (#5)
by spacejack on Fri Apr 20, 2001 at 05:17:11 PM EST

But now would be a really good time for advertisers to buy up space. The prices are rock-bottom, barely enough to keep small sites alive. How much, in comparison to say, a nationwide billboard or newspaper campaign, would it cost for a blanket promotion of a new movie, or your typical Coke/Pepsi/McDonald's campaign?

They just need to do 2 things:

a) treat the ads seriously -- i.e., don't think that just because it's a small banner you can just pay some kid graphic designer $50 and it'll sell your product.

b) exactly as regeya says, forget about click-throughs. Ok, sure take em if you get em, but who clicks-through a real-world billboard?

full disclosure (4.66 / 3) (#7)
by eLuddite on Fri Apr 20, 2001 at 06:07:38 PM EST

MBinteractive provides "a focused understanding of the issues that face technology marketers today" by offering such services as "BrandImpact, Audience Audit and SiteImpact." IAB is the Interactive Advertising Bureau, "The first global not for profit association devoted exclusively to maximizing the use and effectiveness of advertising on the Internet." The closing paragraph you cite,

Given that the Web's advertising power is just beginning to be understood, any advertiser looking to build their brand and increase their sales should utilize online advertising alongside traditional media to ensure their future success.

isnt exactly a suprising conclusion given its authorship.

---
God hates human rights.

Needs success story (4.00 / 1) (#8)
by jasonab on Fri Apr 20, 2001 at 08:34:27 PM EST

I remember reading a story once (which may be apocraphal) about the genesis of TV advertising. Apparently, many businesses were fairly wary about this new medium. They had radio, and weren't sure why television was so much better. Along came a small business (cosmetics, I believe), who began advertising on television. The sales of that business went through the roof, and everyone else quickly jumped on the TV bandwagon, hoping they could duplicate the feat.

I say this because I dare say the Internet needs a similar story. If one business could point to banner ads (or whatever) and say that Internet advertising made that business, everyone else would follow. Until there is empirical (or at least anecdotal) evidence that Internet ads work, the money will likely continue to flee.

Better metrics (4.00 / 2) (#10)
by Scrymarch on Sat Apr 21, 2001 at 03:44:37 AM EST

Yep, clickthroughs are a bad metric and seriously susceptible to manipulation (help this post by clicking this banner ad!). It undervalues viewing, brand awareness, and sales generated.

If 10 people click through and find that my business is useless, how is that better than one person who later buys $500 (or $500 000) worth of stuff?

Some companies seem to be learning this. Apple ran a good series of ads on Slashdot recently that advertised their improved Java support. They were quite pretty, and if you clicked through it gave you an tech advertising speil. I went away with my interest in OS X raised a notch higher. I believe IBM has also been doing some Linux advertisements of this nature.

In businesses where a single sale is in the tens of thousands of dollars, a handful or one sale pursued to completion justifies the entire internet campaign. That sort of information can generally be inferred, and sales are the most important metric for a business in the end.

Are Advertisers Idiots? (none / 0) (#11)
by xah on Sat Apr 21, 2001 at 12:04:18 PM EST

Even minimal web banners are an incredible medium for sending a message to targeted consumers. Advertisers are making three mistakes that explain their frustration.

  • Flashing ads are incredibly annoying. Get rid of the flashing, the dancing animations, the blinking, and the rest of that childish cruft. Either make an ad with a stable image, or an image that doesn't distract the viewer much. An advertiser should never distract the viewer too much because the viewer is only there to see the content, not the ads. The advertiser should create attractive ads that blend well with the web site and don't provoke negative reactions from web viewers.
  • The web is not TV. I know this is news to the old fogies in the advertising world, but it has to be said. The web is not the optimal medium for sending video, and even with 10x the bandwidth, you're still going to get just a little corner of the screen. Advertisers apparently think someday we're going to have full-screen web ads. Any site that tries that will lose nearly all of its visitors. It's not going to happen. Advertisers should figure out how to use the web intelligently, rather than trying to make it into the second coming of television.
  • As many of my fellow K5's have mentioned, click-through is a meaningless metric. The only two messages that need be sent are the existence of a desirable product or service, and how to get it. It's obvious that clicking on a banner ad will get you more information, if you don't already know. (I already know how to buy soda, I don't need to click on anything to tell me how. But if I want pet food online, I need to know what web site it's at.)

    So just be cool, and consumers will come knocking.

Here's the problem, I think (4.00 / 1) (#12)
by regeya on Sat Apr 21, 2001 at 12:31:58 PM EST

It's not advertisers making banner ads for the most part. It's some '31337 h4x0r' nephew who knows how to make annoying banner ads. I look at most banner ads and cringe. :-) Have these people never learned anything about design in their life???

[ yokelpunk | kuro5hin diary ]
[ Parent ]

user retention and full-screen ads (none / 0) (#13)
by BierGuzzl on Sat Apr 21, 2001 at 12:49:31 PM EST

Although I wouldn't go so far as to say that advertisers should be interested in sending full screen video to their target audience, I do think that advertising can be creatively integrated into a site's flash intro. This could take the form of a tastefully animated logo in concert with the rest of the presentation, taking advantage of a moment when the browser isn't distracted by all of the actual content of the web site.

Frequency is an issue that affects retention more than most would admit. If you're shown 100 different ads, the likelihood of any of you remembering what 5 of them were is pretty slim. On the other hand, had those ads been replaced w ith only 10 ads on a repeating/rotating schedule, you would find your memory trained to recognise the ad even out of the corner of your eye. This can be compared to "theme" commercials on TV, where you already know what's going to happen next because you remember that company's previous commercials -- or the intel commercials where the audience is aware of the product right from when they see the blue-headed drummers.

Another thing that some sites are just beginning to realize is that site design has to be done with advertising in mind from the get-go, not just tacked on after the fact. A banner ad on the top of the page is getting easier and easier to ignore because we all expect to see it there and are getting practiced at skipping it. Unfortunately, the shape of the ad makes it retarded to stick it halfway down the page. Here, again, creative solutions, such as a box partway down the screen, perhaps indenting the content a little, offering a user poll on some product offering,etc --the web is interactive afterall. Advertisers would just have to convince the audience that they aren't go ign to be snatched away from their current task for more than a couple seconds -- no marketing surveys!!

I think that further studies such as the one mentioned in the article need to be done ASAP --the internet advertising industry could reach a near collapse without some sort of understanding of how this business needs to be carried out. They're playing pin the tail on the donkey with millions of dollars -- it's insanity. In any other medium far more research and resources go into creating an effective message that targets an audience and gets a message across so that it stays with the viewer/listener long enough so that they just might purchase the product/service.
- doh -

Entertaining vs. Annoying Ads (none / 0) (#14)
by Ray Chason on Sat Apr 21, 2001 at 04:14:10 PM EST

Consider, for instance, the ad from Penguin Computing where a Godzilla-sized Tux proclaims, "Good evening, Mr. Gates, I'll be your server today!" Tasteful, amusing at least to Penguinistas like me, and doesn't go out of its way to distract me from the content.

Now consider that accursed punch-the-monkey ad. Punch the bonehead who came up with this, is more like it. I have no idea who made it, nor do I care. Fortunately, it's a Java applet, and so turning off Java banishes it from my browser forever.

Certain ad people just don't get it. I don't have to look at their ads. Yet some people make ads that annoy and distract, and then go further and further out of their way to shove them in my face. It never occurs to them that they can make me want to look at their ads.
--
The War on Terra is not meant to be won.
Delendae sunt RIAA, MPAA et Windoze

Banner Advertising--Is It Really A Failure? | 14 comments (13 topical, 1 editorial, 0 hidden)
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