Display Ads, Whither to Wither?

According to the "Natural Born Clickers" study (released recently by ComScore and media agency Starcom), the number of people online who click display ads has dropped 50% in less than two years. They conducted a similar study in 2007 which found that 32% of the respondents affirmed they clicked on banner ads; now, two years later, the figure is down to 16%.

Ad Age, in their article discussing the study, leaps to the question of whether Click-Thru-Rate is the proper metric for online display advertising. They report ComScore as determining, through "client studies," that banners generate significant lift in brand-site visitation, trademark search, and both online and offline sales among those exposed to the ads.

I have to confess to skepticism about this. I'd have to see those "client studies" to determine their scientific rigor.

While I believe in the importance of branding, and I am willing to admit that display ads might be able to help lift a brand's awareness or mindset penetration, I doubt very seriously that really accurate data can be identified to prove this. We in the interactive marketing space like to tout metrics as a core part of the web's value, but in the case of display ads, the most obvious or intuitive metric (clicks) are usually SO LOW as to be worthless as a way to make money. I sure wouldn't pay thousands of dollars for at best a 0.4% CTR...so it behooves publishers to try and justify, however possible, this revenue-generation method with which they are stuck.

The paradigm needs to continue to shift and we need to continue to innovate. A reader identified as "ivak99" makes a very good response to the Ad Age article in which he points out that internet users are "active" while banner presentation, like TV commercials, are intended for a "passive" viewer. Marketers need to leverage the strengths of the medium and craft content, as well as traffic-generation methods, that DO work on the web. Banner ads really don't and we should not be wasting money on them when we can innovate and figure out new and exciting ways to get our customers the stuff they need, and when they need it.

It's the End of the World as We Know It

…and I Feel Fine

(with apologies to REM)

Sean Carton recently wrote a very interesting column on ClickZ entitled “The End of Ad Agencies as We Know Them.” (http://www.clickz.com/3633372) He posits that a confluence of shifting forces have created a new world in which the “full-service monolithic agency model” is no longer effective and will likely die away.

• The Internet has changed how consumers are willing to receive information about products and services; instead of an “interrupt” model where channels are limited and attention has to be grabbed within a narrow set of viewing options, the consumer is now in charge and has a nearly infinite range of choices for viewing and receiving information
• Because of that, traditional media (broadcast television and newspaper/periodical readership, specifically) is experiencing monumental audience loss and a corresponding plummet in advertising revenue
• The economic downturn has exacerbated job loss in the advertising industry, releasing thousands of talented professionals into the market who often establish themselves as freelancers or independent contractors within their particular specialties. This has significantly improved the freelance pool and has made it relatively easy to find a qualified resource when one needs it for a particular project or program.

Agencies will need to remake themselves in a new image to cope with, and survive, these forces. Carton has an idea as to how that might work:

"So what's the agency of the future going to look like? Probably a lot smaller and focused on strategy, account/project management, creative leadership (but not execution), and media strategy (but not planning and buying). Most agencies will revolve around these hubs if they're honest with themselves. Agencies will exist to provide high-level strategic guidance that clients need in a media-chaotic environment. Agencies will expand or contract as needed or will explore radical solutions such as crowdsourcing to get work done for less money."

Historically, the B2B space has been smaller in scale than the monolithic full-service model as described by Carton, but the description is still applicable. Choices have been few on the business side, with media typically limited to trade publications and trade show sponsorship. Marketing consisted of making brochures or direct mail pieces, for the most part, or sponsoring educational outreach efforts that were necessarily limited in effect.

Now the options have exploded with the growth of the internet. Email marketing is now much more cost-effective and arguably more precise than printed mailers; web sites can be updated regularly and fresh information made available much more quickly and cheaply than a brochure redesign/print/mailing.

Coming from the interactive sphere, I have no reason to weep if this particular vision of Rome burning comes true. The key characteristics of interactive marketing are in direct contrast to those of traditional advertising.

Good interactive communications:

• Are crafted to receive interested visitors rather than reach out to grab attention
• Speak well to niche audiences as opposed to appealing to the lowest common denominator (and can speak directly to ALL audiences individually, there is no limit on the quantity or type of content that can be made available)
• Are measurable and can be tied to specific success metrics, vs. broadly distributed and only vaguely associated with quantifiable results

The challenge remains to develop a new agency model that can adapt to the realities of this new world and continue to properly service clients as well as be profitable. The value we bring as professional marketers will evolve from the “big idea” to more of a content-based approach, especially in these economic times where client staff has typically been reduced to skeleton levels. We will be integrated into not just the marketing of the client but the sales process as well. An agency of the future will:

• Staff core skills and abilities (like strategy, industry knowledge, creative direction, account relationship) but bring in freelance or independent resources for tactical execution needs (design, web programming, project coordination, media buying)
• Be a key partner to clients in developing content for use across all channels; this means becoming an expert in the client’s business and being able to step in and generate anything from press releases to web page content to technical white papers, at least in initial form. More importantly, the agency will need to be able to aggregate raw content from the client and refine to appropriate delivery format depending on the tactical need. Content management will be a key service in the future agency-client relationship.
• Build metrics and analysis into all client work; ROI calculations need to be considered for every engagement. Even broader-scope communications like TV or radio advertising are going to be tied into an interactive component, and agencies must be very sophisticated in how they track results that will cross several media channels and impact brand engagement over time. Clients will expect this as they themselves become more concerned with cost control and managing tighter budgets.
• Have a tight estimating and proposing process, which will then result in a tight project management process. Agencies need to know their actual costs for prospective projects, and make sure they know what they are providing for any retainer fee structure. Clients will pay for good talent, but measurable return is the benchmark of the future.

So it may be the beginning of the end, but smart marketers know that an end of an era marks the dawn of a new one, and if we play it properly we will emerge stronger from the cataclysm and succeed where others will fall away.

Banner A**

I need to rant about something that is a pet peeve of mine: banner ads.

First I should say, from a practical value standpoint, banner ads suck. As documented a billion times, banner ads are routinely ignored, disparaged, and despised by web users. The actual trackable return on investment is almost always miniscule. The vehicles for these ads, the web sites and applications that can be used by millions of visitors, still do not encompass the greater pool of possible customers and cannot support the demographic targeting that might enhance your messaging.

Now I primarily swim in the B2B space. In this world, unlike the B2C, you are typically able to pretty precisely define your customers. By definition, they are engineers or architects or industrial designers in a particular vertical market. In this world trade publications really do have value because their audience really can be assumed to match our targets. The reach may not be all-encompassing, but at least you can be fairly sure that everybody you DO reach will at least have a professional inclination to pay at least a slight bit of attention.

Thus I grudgingly admit that banner ads (and its ancestor, the equally ROI-deficient print ad) in trade publications have some value. So we want to make good ads that attract attention, convey the proper call to action, support the brand, etc. etc.

HOWEVER: as important, or arguably more important, is what happens AFTER the reader clicks on the ad.

The genesis of all this ranting involves a client of my agency. We do not directly manage their interactive efforts, but we have developed microsites with them in conjunction with a very successful integrated campaign aimed at different groups of target customers. Thus we were a little surprised to see them in a banner ad on the web site of a very popular trade magazine in the building construction industry.

What I saw was on the site’s home page: our client had a square banner space in the middle, lower part of the page (falls below the fold in my browser). The ad was for a particular package of publications that our client has put together aimed at architects, which they sell via their online bookstore.

All well and good.

However, when you click on the ad, you open the home page of the client site. Problems are legion:
--the home page does NOT have a header or any other kind of graphic that mentions the Architect package
--there is no special call-out to point the users to the bookstore (where they can buy the item), only the standard navigation links
--if the user is intrepid enough to fight their way through 3 subsequent levels of navigation, they will eventually land on a purchase link for the product—but only a banal text list of the contents, no descriptions or other content that might get an architect interested in purchasing

Imagine the user experience: he or she sees the ad, interest is sparked, it is clicked, and…s/he lands on a home page with no mention of the subject of the ad, no links to where the thing can be purchased, no call to action, and no clear support for the user’s needs AS DOCUMENTED BY THE ACT OF CLICKING.

Ideally, the user should go to a landing page that echoes the message of the ad and speaks directly to the user, and preferably has a direct call to action that allows him or her to IMMEDIATELY purchase the item.

This is a classic example of how banner advertising can ultimately be *USELESS* no matter how much traffic it generates. I bet you that 99.9% of the people who click through the ad immediately exit our client’s site. All the money they spend advertising with this popular (and therefore probably expensive) trade publication is wasted because their site is not set up to properly receive those people clicking through.

The receiving end of an online campaign is as important or probably MORE important than the creativity or effectiveness of the ads themselves. It is almost criminal to have somebody click through (thus demonstrating that they are a qualified and interested lead) only to insult them with a lack of support for their interest on the site itself.

If you must advertise via banner ads, then you MUST consider the second part of the equation: what happens after the click. We have to help our clients think about their sites themselves and help them optimize the user experience, identify a conversion metric, and channel the users into that conversion—oh and by the way, help them track that metric and determine what users are doing and learn whether or not the $ they are spending on banner ads is really worthwhile. Those are foundational strengths of the web channel, and if they are ignored, why bother being on the web in the first place?

I have a colleague who has a colorful way of expressing displeasure with something. He’ll say, “That looks like a**” (using a term referring to the gluteal area, what the Hawaiians call the okole).

Well, that’s how I feel about banner ads when they are not properly supported on the web site receiving end. They are not banner ads, just banner a** when that happens.