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.