Does Everyone Hate Banner Ads?

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Whether you're in advertising or not, at some point, everyone has been a banner ad hater. From a loud auto-initiated video at the office to an inundating takeover by Taylor Lautner - one that mysteriously became the background of my iPad and then wished me a "Happy St. Patrick's Day" - we've all been victims of an unwanted, unwarranted, or irrelevant banner ad. Even when I tell people what I do, and mention online banner ads, their faces typically show a mild tolerance for the topic. Or they say flat-out, "I hate pop-ups."

EMarketer estimates spending on U.S. online advertising will grow by nearly a quarter in 2012. However, banners' projections are below average for the category. And they'll continue to grow at a slower pace than other forms of online advertising such as paid search, video, and mobile. While banner click-through rates continue to decline, marketers are working to find more ways to validate that banner messaging resonates with consumers, from engagement to direct response metrics. Guess what? The secret is out: blasting billions of untargeted impressions to the masses and tracking latent activity is not an effective form of advertising - at least to some of us it is.

According to comScore Ad Metrix, AT&T, which has been the leader in advertising impressions for the last several years, served nearly 106 billion impressions in the U.S. during 2011. What's more, the number of advertisers who served over 3 billion impressions in Q4 2011 increased from 24 to 46, compared to the same quarter the previous year. But let's put this in context. EMarketer reported 231.9 million online users (18+) in the U.S. last year. So, if every adult watched an AT&T ad an even number of times, then it would have been seen an average of 456 times during the year. Yikes! Apparently we have a ways to go in shifting the paradigm.

To change the perception of banner ads, many things must change - and the responsibility falls on more than just advertisers.

• Clear up the clutter. 4,812,759,073,000 impressions were served online in 2011. That's an average of 20,753 ads per online user. No wonder people have become desensitized to advertising. In fact, three in 10 display ads go unseen by Internet users (comScore). And with that rate increasing, media buyers have less control over the inventory they purchase - specifically when using a network, platform, or exchange. Publishers must start taking control of their inventory and stop disseminating thousands of ads for pennies, devaluing the space.
• Create relevancy. The availability of low-cost inventory is driving more impressions and the aggressive DR goals on behalf of advertisers. It's a continuous cycle. Surprise! I can get a targeted placement with a $15 CPM to generate a more aggressive CPA than a $0.35 CPM. Why? Because the context of the ad targets a more qualified audience. Conversion rates increase when advertisers target and reach someone actively seeking out a particular product or behavior.
• Offer real value. Content is still king. This draws consumers to engage with a website or an ad. But what's the value proposition for consumers - to inform, educate, entertain, or inspire? Within an ad, we need to recognize the importance of the consumer benefit. We must develop a model of pulling them into an enticing ad, rather than pushing impressions out.
• Teach privacy concerns. The IAB and companies like Evidon work to ensure consumer control over what is tracked. But there's still a lot of noise from the opposition about what, when, and how people can truly opt out of online tracking. Recently, Do Not Track technology bubbled up in the press - along with a lot of finger-pointing at the advertising community. Overall, the need for education and transparency on both sides is clear. Advertisers should not leverage "creepy" targeting tactics - and online users must understand the benefits of non-personally identifiable tracking, so ads will be more relevant for consumers.

Last year, the Panda update by Google did a good job of placing more emphasis in the algorithm to the user experience - all with advertisements as part of the equation. Let's face it: in general, no one goes online to see a banner ad, drives to see an outdoor billboard, or watches TV to see commercials. However, as an industry, that doesn't mean that we can't offer a better experience given the capabilities of the online environment.