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Enjoyed Cliff Kuang’s piece ( on why ads might be to blame for the crappy state of Internet advertising. I think the key words in his piece are "useful functionality".  While I agree that ads that don’t just sit there are better overall, the key is in defining what constitutes "useful".

Advertisers need to spend more time figuring out WHAT the people they are trying to reach WANT from them WHEN they reach them. In other words, just because you add a bunch of functionality to a banner, doesn’t mean your click through or the actions someone takes after the first click will be any more valuable to your business.

Advertisers are best served when they define what role the online ad plays in the purchase funnel? Is it to convert people who are active prospects or is it farther up the funnel where people need to be engaged in a different way. Often they are truly up the funnel but yet the ads are treated as if people are ready to buy.

Today, there are many opportunities for online marketing to be a "service" to a consumer and not necessarily sell.  For example, we built a flash player for Microsoft that enabled them to stream live useful content to small business owners and at the same time syndicate it across the web. It lived in a banner unit that expanded when clicked on to reveal the complete player.  Engaging people in that way exceeded our product demo goals 5x.  And I guarantee it worked better than a banner with a "get your demo now" message.

My point is, when advertisers get too obsessed with click-through rates, banners become very direct response focused and brands can miss an opportunity to engage the a prospect in a deeper more meaningful way.

You can see the archived player here: