Why Do Marketers Buy Banner Ads?

They drive tiny, tiny click-through rates & if you ask the average person what they think of them the answer will be (at best) apathetic or (at worst) disgusted, yet display ads continue to be incredibly popular amongst marketers & search engines have been snapping up every display ad network going. So why are display ads still so popular? Why does anyone sell them & why would anyone want to advertise using them?

Why Do Websites Sell Display Ads?

1. They’re an easy medium to sell to advertisers

• Advertisers are used to them/comfortable with them
• There’s a proven market out there
• There are standards, systems & languages in place - no reinventing the wheel
• Creative agencies are familiar with them & will be able to create/supply them (usually to pre-determined budgets)

2. Display ads are a comfortable, quick, calculable monetization tactic

• If you’re generating X impressions per day & you sell 2 skyscrapers a MPU & a leaderboard on every page, you will make X amount of money per day. You can write a business plan based on that kind of stuff & can prove to a potential buyer of your business that it has some measurable sustainable income
• You’re not reliant on the quality of the advertiser’s ad (unlike a pay-per-click ad): no matter how bad the ad & how low the clickthroughs, I’m still going to get the same amount of money

3. Bad/irrelevant display ads don’t diminish your brand as much as bad editorial content

• Everyone recognises these are sold ads & not as endorsed as editorial content. If someone pays you to place bad editorial content on your site, it diminishes your image far more than bad advertising content. (for example - do viewers stop watching ‘Lost’ because a particular Honda ad annoyed them during the break?)
• People are used to ignoring banner ads & they’re so ubiquitous that their power to annoy has largely turned to indifference

Why Do Advertisers Buy Display Ads?

1. Simplicity

1. It’s a very safe medium. Just like the old IT-industry adage “nobody ever got fired for buying IBM”, nobody ever got fired for throwing Banners in their marketing mix.
2. They’re a quick & easy buy: creative agencies are geared up for them; you know exactly what you get & what you pay in ad costs (rate card minus whatever discount you can negotiate)
3. It’s far, far easier to buy a display ad than get the equivalent volume of editorial space on a third-party site

2. Branding

1. They give you the opportunity to place your brand in front of thousands of eyes at a known cost (display ads are usually sold on a ‘CPM’ - cost per thousand - basis, so you can report back to your boss/board that you’ve generated X thousand impressions.)
2. Though it’s not as good as appearing as editorial content, the idea is that viewing an ad on a ‘Trusted’ page should transfer at least a little of that trust across to your brand/product
3. While a very low percentage of viewers click through ads, several studies have shown that visitors who’ve seen a series of your ads (often without remembering) are more likely to visit your site when they see a link to it/trust you over an unknown competitor/purchase from you
4. They’re a great way to ambiently position your company amongst some harder-to-reach groups. Here’s an example: Let’s say you’re Cisco & you want to reinforce the idea among your shareholders that things are going great. How do you do that? They’re not going to search for ‘Cisco’ on Google, hit your sponsored ad, click the ‘for shareholders’ button & then believe you flat out when you say “things are going great”. One tactic is to buy online display ads that will appear in places where your shareholders go - for example take a look at The Economist, of the Financial Times websites: banner ads for banks, luxury cars, Fortune 500 service corporations - most of which are primarily designed just to be ’seen’ rather than ‘clicked on’.

3. Optimisation

1. If your ad is appealing enough, users have a chance to click through to some real actual “I’m asking for this” editorial content about your product.
2. Because ads get so many views, they’re ripe for multivariate testing. Systems exist to fully automate this: plug in 30 different versions of your ad & find out what works best.
3. Further systems exist to act smarter with banners: display different ads depending on which ads your viewer has seen previously/which sites they’ve visited/etc.

4. Price

• It’s easy to tailor a banner campaign around price.
• There’s a solution for every budget: A ‘run of network’ ad campaign will cost you very little (’run of network’ means your ad will appear on all of the sites within a network), vs single-site or even single-page (for example ‘homepage only’) ads will cost you more.

A Few of the Negatives of Display Ads

1. Everyone knows they’re ads - someone has paid for them to be there to interrupt the content you’re actually looking for, therefore they’re not as trusted, not as read & not as useful as editorial content
2. People have seen hundreds of thousands of display ads & so have built up at least some ‘banner blindness’ - the pavlovian response that says “we can safely ignore that bit - it’s not what we came to this page to see”
3. They drive tiny, tiny clickthrough rates compared to editorial content
4. Unless you have the infrastructure to build numerous ad versions, it’s tough to make use of ‘multivariate testing’ & other optimisation opportunities
5. There’s always a pool of users who will actually think worse of you for interrupting their browsing with your ads
6. Whereas email marketing is almost exclusively ‘opt in’ & you can almost guarantee the relevance of a PPC search ad, display ads are a step further away from permission marketing