Remember October 27, 1994? The day on which something phenomenal happened on then incipient Internet—banner ads saw the light of day—courtesy of HotWired.com. Though the copy of the original banner ad was pleasantly simple, yet it marked the arrival of a new era in online advertising. In the next two decades that followed till now, this form of advertising once enjoying the status of a galactico has been relegated to the sidelines with click-through rates touching an appallingly low 0.08%. So, are banner ads having one foot in the grave? That’s a hell of a poser because advertisers and publishers are nowhere near unanimities around this issue. Some have happily written them off and shifted to native ads, social media marketing or other content marketing delivery tools, but many still find opportunities in them.
The main problem with banner ads today is that it is continuing somewhat as a relic of the past. Despite striking developments in digital advertising technology, banners are caught in a time warp and hold an eerie resemblance to their forefathers from the 1990s. This has made newer formats, which are far more relevant for the current web, soar in popularity. Besides this, there are other reasons pouring cold water on banner euphoria.
However terrifying it may sound to advertisers, the hard fact is that people abhor banner ads. According to Internet analytics firm Comscore, in 2012 more than 5 trillion banner ads were delivered to netizens in the US alone. But an Infolinks survey conducted in the same year said that mere 14% of the US users could remember the ads they saw. While a study by Solve Media discovered an interesting, although a bit hilarious, statistic: people were ready to accept the rigors of ascending the world’s highest peak Mount Everest than clicking a banner ad.
These figures categorically indicate that even if advertisers swamp them with impressions, the target audience doesn’t care a damn about them. They view it as an intrusion on their privacy as the ads tend to distract them from what they are looking at. Irrelevance is another thing that gets users’ goat. Most of the ads that are being displayed along with the content have zero contextual relevance. The Infolinks survey, referred to earlier, revealed that 80% felt the last banner they viewed was utterly out of context.
To get rid of the in-your-face bombardment of banners, users are resorting to ad blockers. This is causing site owners to abandon a huge stream of revenues that runs into thousands of dollars. Meanwhile, anti-ad and anti-tracking services like AdBlock Plus, NoScript, or Disconnect are going great guns. According to a 2013 report published by the Irish firm PageFair that helps Internet companies reclaim their ad earnings, 27.2% of web surfers were blocking ads on its clients’ websites.
Extreme indifference aka banner blindness among site visitors is not the only thing that the online advertising industry is struggling to deal with, widespread occurrence of click fraud is also harming them seriously. Fraudsters inject malicious codes into computers of unsuspecting users and transform those into bots, and then the infected machines become part of a larger botnet. Now, the zombie computers visit sites scammers prefer and click ads mimicking human behavior.
In 2013, security analysts at Spider.io (now a Google company) busted a botnet named “The Chameleon”. It was bleeding marketers of an amount as big as $6 million monthly by making spurious clicks on ads served in around 200 sites. A much bigger conspiracy was detected by the FBI, in which Estonian fraudsters enslaved 4 million computers for running an ad-fraud program.
Though advertisers are facing devastating consequences out of bot activities, the actual scale of the threat is yet to be determined. Using a combination of multiple approaches like post-event reporting, real-time detection, blacklisting, or causal attribution they are trying to alleviate this pain in the neck.
The severe outage suffered by DoubleClick for Publishers (DFP), Google’s ad delivery platform, on November 12, 2014, has proved that relying too much on a single system may not be a good idea for marketers. As the downtime has continued for over 60 minutes, real estate allotted for ads on web pages has stayed empty. According to an estimate by a rival platform, publishers sustained in total a $1 million loss per hour due to the disruption. To avoid this type of complete ad-blackout, in future they may be attracted towards similar options such as Atlas, OpenX, or AppNexus.
It is unlikely for marketers now to replicate the unbelievable 78% click-through rates of the first banner ad. What they can do is to chart out a judicious banner strategy. They can use banners for remarketing purposes. Also, the ads can be made less interfering by better design. And most importantly, they have to keep up with the times and embrace fresh innovative avenues to circulate advertisements.
Banner advertising has successfully survived for 20 years. As things stand, not even the greatest banner evangelist can guarantee that it will live unscathed for another 20 years. However, it’s not going to give up the ghost very soon, that’s for sure.