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Monday, March 10, 2008

What We Have Known for Awhile - the Banner is Dead

A really interesting study came out from Comscore a couple of weeks back. It is pretty much summarized by this quote:

"the study reveals that a very small group of consumers who are not representative of the total U.S. online population is accountable for the vast majority of display ad click-through behavior."

What the study goes on to say is that a subset of population that represents only 6% of overall online users accounts for 50% of the banner / display clicks. Not only are these people click happy but they skew to the 25-44 age group, have an avg household income of under $40,000 and spend more time online at auction, gambling and career sites. Not exact the best use of advertising dollars.

Now that you have all of the money from your display advertising budgets here are a couple of ideas on where to spend it.
  1. Search - you are not spending enough - trust me nobody is!
  2. Add Social to your site - start building a platform where you can have customer interactions. If you don't know where to start partner with a company like bazaarvoice and just listen.
  3. SEO - you can always make improvements and the easiest next step is to build content that is relevant to your consumer.
  4. Excitement - build something that gets customers coming back everyday and gets them talking about your business
The flip side of the banner argument is that a click is not what we, as marketers, should be measuring as a success event and that targeting the right consumers is what we should focus on. But lets not keep trying to trick ourselves, consumers (and we are included in this group) have learn to tune out banners when surfing. Quick, name the last 3 banner ads you saw online.....

6 comments:

Jay Shaffer said...

Hello Simon - Great Blog post! I think you covered some very key points in terms of todays marketplace as well as offered up some great suggestions on how best to spend their advertising budget.

In terms of adding the "social" to their site, there is perhaps a much more inexpensive solution by www.PowerReviews.com. Their review solution is widely adopted and includes no implementation fees nor monthly maintenance fees and is entirely based on a pay-for-performance affiliate model. Plus the new source of traffic generated by the Buzzillions.com social shopping platform converts at one of the highest rates in the CSE arena. I hope this helps your readers out with another great way to maximie those highly valuagle marketing budget dollars this year!

Jay Shaffer
VP Sales & Marketing
PowerReviews.com

Joel said...

Simon,
Again we disagree on this.
While we certainly should look beyond click rates to measure performance, banner advertising is no more dead than tv, print or radio.
First, take note of another quote in the press release:
“While the click can continue to be a relevant metric for direct response advertising campaigns, this study demonstrates that click performance is the wrong measure for the effectiveness of brand-building campaigns,” said Erin Hunter, executive vice president at comScore. “For many campaigns, the branding effect of the ads is what’s really important and generating clicks is more of an ancillary benefit. Ultimately, judging a campaign’s effectiveness by clicks can be detrimental because it overlooks the importance of branding while simultaneously drawing conclusions from a sub-set of people who may not be representative of the target audience.”
Second, consider that post-impression activity (activity by users on your site after they have viewed, but not clicked on a banner) is often a large percentage of the traffic and conversions that are (and should be) attributed to any media campaign. Ultimately, you should be factoring that activity in and using a conversion rate (with a conversion being defined as whatever action you ultimately want the consumer to take) as the basis for measuring your advertising.
Finally, I don't see search as a stand alone medium. You can always pump money in there, and you will see a pretty good return, but you should. Because people are asking for your site/information/product. They already know about you. But for brands/products that people don't know, search can't do all of the work. I believe that there IS a value in a brand and a brand is created and maintained through advertising. A brand cannot be built using search alone.
Set some realistic conversion goals for your marketing campaign and then let a diversified advertising and media mix accomplish those goals while laying the foundation for future success.

Simon Rodrigue said...

Joel,

I don't buy the eyeballs argument, it's weak at best. The Internet is an interactive medium and because of that we have become very good at tuning out interruption or non relevant ads on the web.

The issue is that publishers have a ton of inventory in the marketplace as the model was built on our old understanding of mass interruptions and blasting a message out to be a success so they need to push the non click activities if the non click isn't working out. I'm not saying never do banner (but we hardly do anymore) but when you do make sure it is relevant to the consumer. If you are pushing a new product make sure you have your banners in relevant places, at least then they will provide some value to the consumer.

As for search, I'm not saying 100% of your advertising budget but it needs to take a much larger role than it is today, (I would be willing to bet at most Canada companies it is still an afterthought in the budget process) these are consumers looking for information - actual prospects - yet we don't often make an attempt to talk to them.

I guess the whole point is engagement and how are you looking to enter into the conversation with your potential customers, banners seem to me to be weaker every day when compared to engagement type media. Consumers are looking for information to solve a problem or make their life better and the internet is a great interface.

Thanks for posting, I do appreciate the conversation!

Simon Rodrigue said...

Jay,

Thanks for the comment. We looked at both PowerReviews and BazaarVoice when putting the solution in place at homedepot.ca. We went with BazaarVoice as they provided us with a more complete solution that allowed us the opportunity to better interact with our consumers. To us it wasn't about reviews it was about growing interactions with our consumer base and fostering relationships.

Joel said...

I completely agree that it is all about engagement. And while most banner ads don't invite engagement very well, I don't think that you should dismiss the category because of it.
I am a strong believer in a balanced media mix. And I'm sure a lot of companies are underfunding search, but I don't think they should automatically shift funds from display media to search just based on CTRs.

Cheers

miro slodki said...

Simon

totally agree
"But lets not keep trying to trick ourselves, consumers (and we are included in this group) have learned to tune out banners when surfing."

but the bigger question is what happens now

will BT come to the rescue, rely on search and social
and/or do we change the paradigm of what and how we develop relevant offers to consumers that makes them stop and pay attention.

A price and a product tends to need more and more expensive sizzle as time rolls on.

anyhow
my 2 cents
Miro