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Is Banner Advertising Still Relevant?

All of the clicks for online ads are derived from a mere 16% of internet users, according to a recent study by comScore. That means, you’re optimizing your ad for that 16% of users — a very small audience to capture. As consumers become more digitally savvy, they are less inclined to click on advertisements. What happens for those business owners that do not have audiences in that…

All of the clicks for online ads are derived from a mere 16% of internet users, according to a recent study by comScore. That means, you’re optimizing your ad for that 16% of users — a very small audience to capture. As consumers become more digitally savvy, they are less inclined to click on advertisements. What happens for those business owners that do not have audiences in that 16% of users?

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Across the board, people are simply not clicking on banner ads as much as they were two years ago. The number of people who click on display ads in a month has fallen from 32% of Internet users in July 2007 to only 16% in March 2009. “Heavy clickers” fell from 6% to 4%, “moderate clickers” fell from 10% to 4% and “light clickers” fell 16% to 8%. comScore VP, Linda Anderson suggests that these dwindling numbers on click-through ads do not give us the big picture. Ads should also be evaluated on “view-throughs.”

Just as traditional forms of media elevated brand positions in consumer minds, so too do online banner ads. Consider the correlation between “lift” (or impressions that resonate with users so they are more inclined to search for advertised brands) in trademark search and banner advertising in the automotive sector. While the average “lift” is 46%, the automotive sector ranks #1 with 114% “lift.” John Lowell, Starcom USA SVP/Director, Research & Analytics, notes that “a click earns no revenue and creates no brand equity… online advertising (is) certainly not to generate clicks… (but) to visit website, seek more information, purchase a product, become a lead, keep brand top of mind… ”

comScore’s emphasizes on advertising impressions takes into account only paid sponsorship. In a network economy, we are moving away from “paid” sponsorships and towards “social” sponsorships — where brand influence is measured by the value of connections and relationships in the online community, not ad placement. More and more people are flooding social networks — eager to meet new people and make connections. Ultimately, brand value is derived from consumers. Engaging consumers through social media, such as Twitter, Facebook, blogs, etc. creates a buzz and gets people excited about your brand — whereas an ad is a “necessary evil.”

Consider Charity: Water’s Twestivals. Charity: Water was able to mobilize a large Twitter community to fundraise for the organization. Not only was the organization able to raise money, but the community action created buzz in the news and on other social networks. Charity: water was able to think outside of the box and engaged their audiences in new and innovative ways. The organization didn’t need to run paid search advertisements to raise awareness — they relied on their tight network of supporters instead.

For those brands that cannot capture those 16% of clicking consumers, create value through meaningful relationships in the online community. Instead of paying for search advertising, consider the importance of page rank. While 16% of internet users might click on paid links, 100% click on…

To read more about banner advertising, go to Sparxoo, a digital marketing, branding and business development blog.

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