Banner ads used to be synonymous
with online advertising and were central to any campaign. However
in recent times banner advertising has fallen from grace and gained
a reputation for not producing results due to plummeting click through
rates. (Click through rates, or CTR, are a measure of the number of
times people click on an ad and visit the web page it links to).
Falling CTR has resulted in many marketers now dismissing banner ads
as a promotional option.
The decline in advertising revenues as marketers abandoned banner
ads was a contributing factor in the dot com melt down. During the
dot com boom days many web sites were founded on flimsy business plans
and venture capital (read other people’s money) solely with the aim
of creating high traffic sites that would attract banner advertising
revenue.
From the perspective of these web sites, the more traffic the better
because banner advertising is charged for a per impression basis.
Per impression means a charge is incurred every time a banner ad is
shown on a page – not just when it is clicked on). Charging is normally
on a cost per 1,000 impressions basis known as CPM.
Consequently the focus was often on traffic quantity and not traffic
quality. This meant banner ads were shown in a shotgun approach to
one and all, rather than targeted just at the appropriate audiences.
How many times have you seen irrelevant banner ads that simply don’t
apply to you – e.g. ads for USA retirement plans. Every time ads like
this get shown to NZ audiences it costs the advertiser money due to
the CPM charge model. This is crazy when the technology exists to
‘serve ads’ specifically tailored to defined audiences.
Ad server technology such as that offered by DoubleClick means it’s
possible to deliver banner ads with sophisticated precision only to
the target audiences you want to reach.
The exposure of banner ads to untargeted traffic and the decline in
the novelty factor of banner ads meant CTR rates fell through the
floor from the double digit rates they initially enjoyed. With this
ad revenues dried up and many dot com sites dependant on this income
subsequently failed.
Clearly the halcyon days of high click through rates when banner ads
were new and novel are over. But does this mean banner ads don’t work
and shouldn’t be considered?
Proponents of banner advertising contend much of the decline in performance
can be attributed to inappropriate and poorly executed use of this
online marketing tool. The fact is that whilst banner ad campaigns
do get a bad rap they can work when designed and implemented properly.
But do it wrong and you’ll quickly burn through your budgets with
little or no return on investment.
Despite the tarnished reputation of banner advertising it is still
actively being used, as a look at high traffic sites like MSN shows.
Savvy marketers who demand their online advertising delivers a return
on investment continue to use online banner ads because they can work
when done well.
The intriguing thing is that many marketers are still far more ready
to throw money at online banner campaigns than they are to invest
in search engine marketing - despite it being more cost effective.
(That's not just my, admittedly, prejudiced view as a search engine
marketer - but that of others such as Forrester
Research). I will admit however that banner advertising is more
sexy than search engine marketing, so maybe that's the reason...
Developing successful online banner ad campaigns requires a range
of specialist skills ranging from strategy, creative design and execution,
media planning and buying, ad-serving, post-click tracking and reporting.
As such this is an area that’s generally best left to specialist agencies
with the requisite skills.
Next topic:
email marketing
This page last updated
May 03, 2010
