Have banner ads reached their sell-by date?

Banner advertising is the earliest form of online advertising having been around since 1994. While the web has changed dramatically since then, the banner ad has not. There are new sizes and formats that have increased the interactivity and provided new content opportunities within the banner space but the fundamental way the banner ad is sold and measured has not varied much in the last 19 years. Many marketers dismiss banner advertising as expensive and ineffective and in many instances they are correct. However, the problem is not with the ad format but rather the way we measure it.

Advertising has always been sold on the number of eyeballs you can reach –magazines work on circulation numbers and TV shows on viewership ratings. Within digital advertising the main form of measurement has always been impressions. Publishers use impressions to measure the traffic on their websites and advertisers buy space on that website by purchasing a share of impressions. An impression (also referred to as a pageview) does not guarantee that a consumer has seen the advert, merely that the advert was displayed – a problem that also plagues above the line media. Although your banner advert will be displayed, it could be below the fold and the user never gets exposed to it. Straight away this should be an issue for advertisers as the most common cost model is based on the number of banner impressions (CPM) and even more so for Real-Time bidding models where you could end up paying a premium for an ad that your consumer will never see.

iceberg water
Many impressions are delivered but never seen by consumers.

In addition, publishers have adapted their content strategies in order to increase their pageviews at the expense of the consumer. Digital publishers split articles over multiple pages or add slideshows that require the user to refresh the webpage each time, increasing the number of impressions; their inventory, to sell to advertisers. Advertisers tend to believe that a high number of pageviews per visitor determines the visitor’s engagement with the content (e.g. one user reading five articles), but in practice this is often not true. It’s a vicious circle that degrades the consumer’s online experience by making them jump through multiple hoops to read an article and waters down the effectiveness of banner advertising as users flick through pages with minimal engagement.

So should we stop using banner advertising then? In my opinion, no. A good digital media strategy has a mix of channels based on measurable objectives, and banner advertising continues to play an important role therein. A well planned and executed banner advert – albeit a rare occurrence – can be very effective. The quality of the message, the relevance of the environment that the message is delivered in, the frequency it is delivered at, and the audience it is targeting, will all have a hand in determining just how well that message works. When you look at a mix of media and dive into the data behind the banners, quite often your best conversions (signups, purchases or referrals) come from premium display advertising. Placing a banner on a well-established niche website with a loyal readership can drive demand and yield good results.

In the scramble to show it can compete with the reach of other mediums, digital advertising has moved away from its core strength – true measurability. Publishers should be tracking their content closely and focusing on delivering the most engaged audiences possible and looking beyond their pageview metrics. Advertisers should be selecting their placements based on the level of engagement with content and the relevance to their marketing message. By selling advertising only within their most engaged content, the publisher’s inventory would be limited but would drive a higher price. This inventory would be more effective for the advertiser and the user would get an experience that is focused on them.

Chart beat real time engagement tracking
Example of the types of engagement tracking that services like Chartbeat provide.

When marketers abandon their current fixation with page impressions and click throughs and explore the new technologies to measure impact, banner advertising goes from impossible-to-justify to becoming a critical piece of marketing. With better display targeting techniques and web analytics, marketers can break free from impressions by measuring traffic and conversions that come from users seeing display campaigns — even if those users never clicked on an ad (e.g. returning to the website, or searching for the brand at a later stage). These measurement solutions are now becoming available. They are able to measure the level of engagement a consumer has with an advert or a piece of content using analytics tools such as Chartbeat or impact via panel analysis through Effective Measure. With these tools we can move away from the inflated impression models and start tracking the actual influence of the advertising message.

chart beat real time banner tracking
The type of banner ad metrics we should be tracking – actual engagement.

However don’t expect the industry to change overnight. The current model is firmly entrenched and suits many of the big players. It will take a while for the changes to start filtering though as marketers push publishers for better measurement and consumers shift to websites that adopt a more user-centric approach. Banner advertising can be effective if you look at the role it is playing within your overall digital media mix, the metrics you are tracking and how you are determining its success or failure. Banner advertising is not disappearing off the shelves just yet, but it needs more than a packaging refresh to warrant an ongoing place in your digital media basket.

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