Wednesday, March 27, 2013

Before Bashing Banner Ads

They’re a symptom of the problem--not THE problem

Brian Morrissey’s post on Digiday last week (“15 Alarming Stats About Banner Ads”) has sparked a lot of controversy from the marketing community. Here is a sampling of the distressing stats he shared:

* 50 percent of clicks are accidental
* The 468 x 60 banner has a .04 percent click rate
* An estimated 31 percent of ad impressions
can’t be viewed by users


Before we weigh in, take a peek at this online discussion related to Morrissey’s post
One commenter stressed the importance of balance: “Make sure the banners are limited, targeted for the specific needs of your audience, and are unobtrusive. Respect your space and your audience.” Amen.
Another commenter disagreed with the Morrissey’s stats arguing that for those in businesses “where a single new client can generate enough revenue to pay for years of banner ads they are great! The trick is to use good banner ads.” Right on.

Said another, “My peers and I stopped using the CTR to measure the performance of display ads around 3 years ago because it is not an accurate determinant of performance. A good example is a study by Google TechTarget which demonstrated that 44 percent of people who click on paid search were exposed to a banner ad prior to that click. However, most marketers and agencies simply use the first and or last click to measure the performance of digital marketing and in that case display was not getting any performance attribution to the campaigns. They’re selling themselves and their marketing activities short.” Amen again.

Morrissey’s stats are disturbing, but rather than throwing in the towel on banner ads, let’s throw in the towel on ineffective online advertising. Remember that banner ads are one of the cheapest, fastest, least complicated forms of online advertising. They’ve made it easy for armies of lazy, overworked, inexperienced or otherwise unprofessional marketers to get into the game. So what you’re seeing on a lot of websites is a dumping ground for poorly executed and untargeted creative out there by the B and C team. In other words, it’s not the creative assigned to the A team who focuses on the higher priority, more expensive media channels.

Remember, banner ads are just one device in a B2B marketer’s bulging tool kit. And whether or not someone clicks on a banner, hovers over it, or takes further action on it, such as downloading or purchasing from the advertiser, the result of that action is not necessarily the result of the single banner the consumer just viewed.

As far back as 2002-2003, my colleague Rick Telberg and I starting exploring the “latency” effect of online advertising and other cause and effect relationships. Our report “Beyond the Click” still gets plenty of inquiries.

Macro View

The S&P 500 index is now at or near its all-time peak reached in October 2007. Interest rates appear holding steady and housing continues to rebound in all major metro areas around the country. With a 10.2 percent gain over last year’s level, existing home sales continued to climb in February. According to the National Association of Realtors (NAR), the sales rate was the highest since November 2009 when a federal tax credit was propping up home sales. Economists say inventory has been tightening because construction levels are still low, adding little new housing stock, and homeowners are waiting to sell until they have more positive equity.
That’s the big picture, but drilling down, two statistical nuggets caught our eye:

1) First, sales of distressed homes — foreclosures and short sales — accounted for 25 percent of sales, that still a lot, but quite a bit better than 34 percent at this time a year ago.
2) Second, homes were on the market for a median of 74 days. That’s 24 percent better than year-ago levels, according to NAR.


In this era of Big Data and obsessive measurement, it’s easy to suffer from analysis paralysis. Let’s put away the spreadsheets and algorithms for a while and get back to being creative. That doesn’t mean tricking a consumer into clicking (or scanning) on your ad creative. It means finding an emotional connection that draws them to you because you have something to offer them of value at a time when they really need it. Budgets should be loosening up a little in 2013. Let’s not waste this opportunity.

Tags: Brian Morrissey, Digiday, National Association of Realtors, banner ads not working, TechTarget


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