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Display Advertising is Broken?

infolinks, November 26, 2012

Apparently, the only thing that people agree on in this divided country is that they won’t click on ads.  That means for every thousand ads served, we should expect LESS than one click. Adding rich media — once considered the savior for display — increases response slightly, to .14%. Considering that this is the format on which we have essentially built our industry, one fact has become glaringly obvious: display advertising is broken.

Since 2007, industry media and experts like Jakob Nielsen have been waving a flag, warning us about Banner Blindness. For more than 5 years, we’ve known there were cracks in the foundation of the house we were building, and yet we continued to build. In 2010, it was reported that 43% of consumers ignore online display ads. Sure, we’re in the process of adopting new standards, but while those may help improve the performance of online display ads, we’re still working upon that same foundation — a foundation we know is crumbling.

Why would consumers ignore the ads that we have worked so hard to create and place? “The fault, dear Brutus, is not in our stars, but in ourselves.” We in the industry — publishers, marketers, advertisers and media buyers alike — are the ones to blame, for:

  1. Creating an endless tonnage of ad space, one Web site at a time, but adding up to thousands of ad impressions a month for each viewer
  2. Delivering only a small amount of relevant advertising, and leaving the vast bulk of the tonnage to irrelevant offers, sold at rock-bottom prices
  3. Consigning online ads to a predictable size and placement, thereby educating users thousands of times a month where they should avert their gaze to avoid wasting their time looking at useless advertising

Essentially, we have let this happen. As marketers, we have been laser-focused on our ROI; as custodians of the company’s marketing budget, we have watched every penny we’ve spent. We made it a point to buy as many impressions as possible at the lowest possible CPM, hoping to drive the most conversions. We focused on quantity, rather than quality — a classic and tragic mistake.

Yes, we have spent time and creative energy crafting our ads, writing compelling calls to action — but in the end, we didn’t ask enough questions. When we purchased media, did we ever ask where on the pages the ads were appearing? Did we even check? Did we attempt to deliver our messages to people when relevant to the context in which they appeared? Did we ever consider other types of ads — or even consider that there were possibilities beyond standard display placements? We’ve been so busy watching the numbers, our noses buried in the campaign reports, that quality and relevance have fallen from our view. We haven’t been thinking outside the banner.

So how can we fix our caving tower? Now that our industry is truly on the brink of thriving, with more big brand marketers allocating budget to the online channel, how can we repair what seems to be fundamentally broken? Three simple recommendations:

  1. Ask publishers to create unique placements for ads to break the banner blindness cycle
  2. Focus on targeting user intent at that moment, based on what their interest is now — not what they were interested in yesterday, last week or last month
  3. Insist that your ads be shown only when the match between the offer and the intent is high

These steps will ensure that our ads served are noticed, relevant and valuable to both consumers and us.

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