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Stop Banner Ads Now (and Consider Native Ads Instead)

By Nick Mattar
Director of Marketing
Detroit Regional Chamber

This post is part of the Digital Marketing Boot Camp series, a new set of blog posts across different mediums designed to provide intel to people and companies looking to improve their digital marketing strategy.

The year is 2017, when paid online advertising is at an all-time high and people consume more material online and on their smartphones with each passing year. As that consumed content increases, so too does the opportunity for banner (or display) ads and the belief that those ads will inevitably bring more sets of eyes to the paying advertiser’s website. As if web traffic is not enough to entice visitors, these host websites promise the strongest targeting and personalization available. They tell you “we can deliver these ads to the exact demographics you want, at the exact time you want.” And sometimes they do.

Allegedly the first banner ad, this first appeared online in 1994.

Allegedly the first banner ad, this first appeared online in 1994 (Photo: FastCompany).

But the disconnect comes in the form of the consumer. The consumer is smarter now than they were when banner ads first appeared over 20 years ago. The consumer knows the basic banner ad tricks. And, most of all, the consumer ignores your banner ads.

The case against banner ads utilizes three major arguments. First (and most obvious) is the average banner ad click-through rate (CTR). 2010 averages hovered around .1% despite major variance across the internet. The highly-personalized ad was in its infancy and yielded a much higher CTR than standard banner ads. However, those numbers slowly decreased to .08% in 2016. As Business Insider Intelligence showed in its latest trends report, not only have traditional display ads’ CTR decreased, but they now lag far behind native ads, particularly on smartphones.

With the banner ad’s CTR falling steadily, it begs the question: “Why?” The answer can largely be attributed to two words: Banner blindness.

Banner blindness is nothing new to advertisers and the academic community. The first study on the topic was published shortly after the advent of banner ads in 1998 and the term “banner blindness” slowly gained traction in the digital marketing community over time as consumers became more internet-savvy and the average CTR continued to decrease.

There are many reports that studied the psychology of banner blindness, from eye tracking to cognitive processing. Most studies found that banner blindness is a very real phenomenon and considering many of these were published before 2010, those results are likely more profound now in 2017 as consumers learn more about the internet and how pages display content.

Of course, as consumers become smarter online, advertisers and host sites are innovating their ad offerings. New ad placements include page takeovers, interstitial ads and the endless claims that ads can be highly personalized. While those new ad placements may indeed provide a small increase in the aforementioned CTR, there is still the fact that these in-your-face-click-me-now ads may actually hurt the brand equity of the advertiser and the host site.

Consider the following situation: you see a great news headline shared on Facebook or Twitter and you click on it to read the full text. However, as the page loads you are faced with an ad that covers the content of the page and shows you a new offering from a popular brand. You will likely either a.) click the ad or b.) try to find a way to bypass the ad to see what you originally wanted to read.

MORE: Native advertising isn’t the only way to bring new visitors to your site. Learn about SEO, SEM and other related topics at the Digital Marketing Boot Camp, Feb. 15.

But the host site does not want it to be easy to bypass that ad. Instead, they have a mechanism set up where the “X” (which is commonly known to remove the ad) either displays after a delay or shows so small in the corner that it is difficult to find. Or, in some extreme cases, the “X” is replaced with a statement that you can click to bypass the ad. That statement generally is a self-deprecating sentence that makes you (the consumer) feel bad about missing out on something epic or worse, feel bad about yourself. Some common statements that consumers have to click:

“No thanks”

“No, I don’t want to take advantage of this great, one-time offer.”

“No thanks, I do not want this chance of a lifetime.”

“No, my existence is worthless.”

The third option is a bit of an exaggeration, but it is not far from what these advertisers want the consumer to feel. The resulting sentiment is one of negativity to the ad and possibly even hostility toward the ad brand. This has become a new focus of academic studies and theses, the most relevant being a 2010 study by Thota, Song and Larsen simply called “Do Animated Banner Ads Hurt Websites?”

This is the single worst result of a banner ad. Not only does the consumer ignore the ad, but rather than showing banner blindness, the consumer reacts negatively to the ad and subsequently your brand.

So now that we can confidently say that banner ads are bad, what should advertisers do instead?

The answer, for the time being, is native advertising. (We will discuss the qualifier in the preceding sentence later.)

Native ads, by virtue of format, have more to offer a consumer than banner ads. They allow for more content and a better opportunity for the consumers to read and become engaged with the content. Native ads come in many forms – sponsored content, social media posts, podcasts and even video to name a few – but they all provide more context to the consumer.

Native advertising criteria photo

Native advertising must fulfill certain criteria before being published. (Photo: Altimeter Group)

Gone are the days where advertisers have to sum up their offerings in three words and an image. The Mad Men-esque world of advertising is no longer a reality. Men in suits are not sitting around brainstorming how to capture a reader’s attention with tricks and buzzwords (and if they are sitting around doing this, they are probably not successful.)

There has not been as much academic research on native advertising, as it has only popped up in the last eight to ten years. But recent CTR studies show that native is the way to go: on a desktop computer, CTR is two times greater than standard display ads; that multiplier increases for tablet and smartphone users. And given the well-known fact that mobile web users increase every year, this number should be the only evidence needed to convince you to choose native ads over banner ads.

However, social media native advertising such as promoted posts, promoted tweets and suggested pages is another option. Researchers have found varying click-through rates, from the .1% gold standard of banner ads all the way to 3% for big brands or really engaging content. The click-through rate debate rages on, but based on personal experience, the Chamber has seen a 1% click-through rate over four years and 50+ social media campaigns.

Don’t take our word for it. Try native advertising via social media or online news outlet. By providing sponsored content that spends a day or two on the homepage of a news outlet, you could see up to hundreds of views on your content. As long as your content is engaging and optimized for your target audience (develop those buyer personas!) you will be able to pull together a strong native ad campaign… for now.

Rewind back to the first sentence on native ads as a response to failing banner ads: “The answer, for the time being, is native advertising.”

The qualifier, “for the time being” is necessary because native ads will almost certainly suffer the same fate as banner ads. Over time, consumers will learn more about the sponsored content being peddled to them by advertisers and they will show resistance as advertisers find a new medium to offer their products online. As the internet and technology improves faster than any other time in history, consumers and advertisers alike will constantly look for the newest way to buy and sell goods and services.

Right now, at this point in history, banner ads are on their way out, while native ads are “in.” So when an advertiser offers you two options, banner ads or native ads (sponsored content), say no to the banners and give those native ads a chance.

Nick Mattar is the director of marketing at the Detroit Regional Chamber and will moderate a Q&A session at the Digital Marketing Boot Camp.

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