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Is the Banner Ad Dead?

Stephen Biernacki

You might be surprised how long the advertising industry has been asking if banner ads are dead. In fact at the time of this writing, on just the second page of search results for “banner ads dead” on Google is a Forbes article titled “Death Of The Banner Ad?” from 2006. 2006! And just think… I only looked through the first few pages of results. The question of whether or not to make display advertising part of marketing efforts has become a very interesting conundrum for advertisers both large and small. Overall, it all boils down to a single question: is it worth it?

“I don’t think online display is dead. It just needs to be rethought, re-enginered, and reborn. Easy, right? Well, no, because brand marketers want scale and proof of ROI – and given that any new idea in display has to break out of the box-and-rectangle model first, we’ve got a chicken and egg problem with both scale and proof of value.” – John Battelle, Entrepreneur, Journalist, Professor, Author

Easy To Create, Distribute, and Measure
Let’s first identify some reasons that banner ads are still popular, and the numbers certainly indicate that banner advertising is alive and well. While the number can’t be entirely contributed to banner advertisements, Google wouldn’t have sold $5 billion (annualized) worth of display ads in 2011 if banner ads were dead! (For comparison’s sake, Facebook’s 2012 ad sales are forecasted to be around $5.1 billion) But why are so many advertisers buying them? Two schools of thought are the fact that they’re typically very easy to setup and then measure through Google’s AdWords interface (just in case you’re unfamiliar with Google AdWords, in addition to being Google’s main source of revenue, AdWords offers site-targeted advertising for text, banner, and rich-media ads).

Google has made the process of creating, distributing, and measuring display ads straightforward for new customers. For starters, they offer a free Display Ad Builder that helps anyone create “professional-looking display ads within AdWords in minutes.” While most advertisers create and upload their own ads (uploading is done within AdWords), the convenience of this tool must be applauded as it makes novice advertisers and non-creative types more comfortable with online display advertising, not to mention allowing advertisers to create expandable and rich media ads in addition to standard banner ads.

Distributing and managing banner ads within Google AdWords is also user-friendly. While there are a lot of options to consider, the ability to target your ads in several ways, such as contextual, placement, topic, geographic, language, and remarketing really allows advertisers to hone in on their audience. Measuring performance and identifying key performance indicators for your banner ads is also perfectly doable, with data such as conversion tracking, keyword performance, and much more. It should be noted that while it’s simple to get up and running, not too difficult to learn online advertising terminology, and refreshing that Google offers above average support (in my experience), mastering Google AdWords is another story and takes a lot of practice. But for many advertisers, there’s no better learning than on the job, which is a large reason why so many advertisers initially new to using Google AdWords stick with the platform… and continue using banner ads.

Outside of Google AdWords, there are technology companies who advertisers can work closely with in distributing, optimizing, and maintaining banner advertisements. Unlike Google, many of these companies tout their advertising platform as being selected by people and not technology. An example of a company like this is Casale Media.

Are We Just Not Creative Enough?

“We’ve been putting the wrong stuff in the rectangles and blaming the rectangle,” says Chas Edwards, Chief Revenue Officer at Luminate.

This striking quote comes from a compilation by Digiday of industry leaders’ thoughts on the state of banner advertising – a must read. There’s a wide-range thinking and opinion in terms of where the infrastructure currently sits and how it might evolve (or die), but it seems that almost everyone agrees that in its current form, banner advertising could be much more efficient for both advertisers and publishers. But does the experience need to change or are banner ads simply struggling to be effective in their current form because the creative simply isn’t good enough? Darren Herman, Chief Digital Media Officer at KBS+P, The Media Kitchen, essentially says yes:

“And of note, banners aren’t dead – advertisers still need to push messaging to the right audience, at the right time, in the right place. Good creative in a 300X250 actually works — contrary to all of the heat that banners receive.”

This is difficult for me to accept because I think you can only get so creative with a banner advertisement because of the limitations. There is a limit on how deep the brand experience or call-to-action can be. Effectiveness could be exponentially increased if you were allowed to integrate deeper within websites themselves, but that comes at the expense of scalability (new companies utilizing APIs to drive the native experience are working to solve this problem). You wouldn’t be able to optimize the integrated, specialized experience for 1,000 different websites, for example, but can easily publish a banner ad on 1,000+ different websites in a standard format. The problem with that standard format lies with 43% of people ignoring the ads, according to a 2010 Harris Interactive survey. For an excellent example of an integrated approach (where banners make up only a small part of the entire campaign), see how Animal Planet created an immersive experience within YouTube (300×250 promoted YouTube banner ad below).

I’m excited about a new crop of companies popping up that use APIs and other ways of technology driven management of native campaigns.

You can find some other Google case studies where banner ads played a role here.

Would Sharing Help?
Of course it would. In their traditional form that we’ve come to know, banner ads cannot be shared. This is a problem. Having a social aspect to your integrated marketing gets more critical every year, and for many in 2012 it’s going to be a requirement. When you share content that a banner advertisement leads to with another person, that next person is seeing the content without the advertiser incurring the cost-per-click. This is an under-appreciated advantage to creating stellar advertising – in addition to more eyeballs on your content; it can save you money. Entertaining and shareable content wins inside and outside of higher education.

So how can banner ads be shared? One way the landing page content of an ad can be shared is through a +1, an option that Google added to be included on display ads in September of last year. By clicking, people can instantly recommend the content to their friends and contacts. These ads are also social by including the avatars of people who have  +1’d it. Have you seen one of these ads (see below)?

What We’ve Seen Firsthand and How to Get the Best Bang for your Buck
If you didn’t realize it already, the days of determining the effectiveness of an ad campaign with just click-through rates (CTR) is over. We have found that having a low CTR, as banner ads typically do, is not necessarily a bad thing if your goal is to increase overall awareness. By running a pay-per-click (PPC) campaign, you can gain more impressions for a relatively low cost to build awareness and get more value for your money. While clicks are necessary to reach whatever it is your conversion goal is, it’s important to remember that if users aren’t clicking, you aren’t spending money. While you are not getting the measurable clicks for your ads, of which you don’t have to pay for if you are using the pay-per-click method, your ad is still gaining awareness through views or impressions. This is similar to how newspapers and magazines ads are utilized.

Earlier in this post we talked about the importance of creative and our experience has shown us this is a huge indicator of the effectiveness of  banner ads, much like Darren Herman suggests. Some key indicators of the effectiveness of banner ads are based on if the banner ads are animated. Animated ads regularly do much better than static ads, especially when placed higher on a page. It is also advantageous to have about 7 words per ad or less and contain a simple overall message. Another key: sell just one aspect of university’s brand rather then trying to sell the entire university. And, of course, keeping the creatively fresh and interactive is helpful. Here are five excellent interactive banner ads for inspiration! The more focused, customized, animated, interactive, as well as on strategy you can be, the better results you’ll may see.

Overall, many have seen a decline in performance and value when it comes to banner ads. Our analysis indicates there is simply better value elsewhere… for us. This may or may not be true for you. We have simply found more measurable success with other forms of online and web-based advertising. Have your experiences been the same?

How About Mobile Banner Ads?
Mobile is an entirely new can of worms and one that we’ll talk about in-depth next month. Banner ads simply do not translate all that well in their current form to mobile, but they could be beautiful. Stay tuned for an entirely mobile-focused blog next month or you can subscribe to our blogs on the left of this page so you are sure to get the mobile banner ad post next month in your email.

For Fun: The First Ever Banner Ad
I can’t think of a more interesting way to end this post than sharing the first banner ad ever. The AT&T ad ran on HotWired (now Wired) in 1994. According to Wired co-founder John Battelle, it achieved a 78% click-through rate.

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