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Do Banner Adverts Actually Work?

· Market Research,Advertising,Display

As someone who used to work in a creative agency I can tell you first hand that briefing a creative team to design a banner advert is like telling a world-class baker to go buy a Mr Kipling madeira slice. I have heard so many people saying things like "banner ads are useless / ineffective / a waste of money" or, if they are feeling particularly dramatic, "display is dead". I wonder to what extent these opinions are well founded? Today in the US, 52% of non-search digital ad spend is programmatic and this continues to grow globally - so clearly someone somewhere believes it to be worthwhile. Why?

I am working on building a new form of ethical display advertising so it’s important for me to understand its limitations and find the untapped potential within. Are they really are a waste of time, money and creative genius or are they an underestimated tool in ad lands' toolbox?


With invasive pop-ups and attention-seeking calls-to-action it’s really no surprise that people are adopting ad blockers left right and centre. Bob Hoffman, the man behind Ad Contrarian, was recently quoted as comparing ‘click now’ online ads to direct response ‘junk mail’. “The stuff that came out of the direct response side was always the lousier stuff, the crappier stuff, compared to the Madison Avenue-style brand side, but now it has been kind of normalised. And people don’t like it - they are turning it off in their millions.” With the recent formation of the ‘Coalition for Better Ads’, key industry players such as Google and Unilever are finally moving this up the agenda.


If an ad is served in the middle of a forest and nobody see sit – does it actually happen? Well regardless of the answer the brand still has to foot the bill. Obviously this not ideal for the brands and also it’s not great for fostering quality and trust within the industry. According to DigiDay, a recent Meetrics report shows that the number of UK display ads deemed viewable has sunk to its lowest level in 18 months: down from 54% to 47% in the second quarter this year. So when considering if banner ads work, it’s also important to bear in mind that it might be the banner that isn’t working rather than the advertising.


Display ads don’t have particularly impressive click through rates. According to benchmark data from DoubleClick, traditional formats including banners, rich media and sponsorship ads, saw an average CTR of .08% from September to December 2015. Not great. However make these ads native and put them on a smartphone – the CTR is suddenly .38%. Or instead, put these ads on a premium publisher’s site and the positive ‘halo effect’ will result in 67% higher brand lift compared to non-premium environments. Not only this but display ads can have different effects depending upon the purchase intent of the consumer. Recent research has found that when a consumer is targeted earlier in the purchase funnel, one additional minute of exposure to display advertising can increase the likelihood of visiting a company website by almost 10%. Clearly the ad environment and the context of the consumer mind-set are both highly important factors in the success or failure of the comms we serve online.


Advertisers do love a good click-through-rate. OK, if you cut keys and someone is searching for key cutters on Google, you definitely want them to click on your link. But are we so sure that clicking always equates success? When a consumer is on a news website, they don’t want to get keys cut they really do just want to read the news. In this whitepaper by Konrad Feldman they report that 300 people saw a display ad, clicked on it and bought the product. Ok… but 23,000 people saw a display ad, didn’t click on it and purchased the product at a later date.

So yes, display advertising is a bit of an ugly duckling. But it also can be a swan. For decades it has been a cheap, fast and easy way to speak to consumers and this has lead to the ‘junk mail’ effect - with poor quality creative in poor quality environments. Couple this with a loose understanding of what we’re truly measuring and optimising for and you can understand why the format receives little enthusiasm. But in fact, much like the glossy, glamorous print ads we still see on the pages of Vogue – banners are a gateway to the most highly respected and highly valued online environments. This has a fantastic halo effect for the brands lucky enough to be featured there. If we take time to understand the context the ad is being served in, if we make it fit with the native environment, make it mobile friendly and relevant – then this halo effect creates something much more valuable than a click. It fosters trust and loyalty and ultimately it really can drive conversion.

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