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How the Display Industry Wastes Billions of Dollars on Ads That Don't Work

Posted by Dave Zinman on June 26th, 2014 at 11:26 am

Display advertising revenue in 2013 reached $6.1 billion, according to VentureBeat. DG MediaMind puts the average banner ad response rate for 2011 and 2012 at a shocking .1 percent (and it hasn’t gotten any better this year). Only one tenth of one percent of all those billions spent is actually accomplishing its goal of customer engagement --approximately $6 billion wasted. What is the reason? And how can an industry, especially as large as this one, operate at .1 percent efficiency?

Firstly, at least 86 percent of consumers suffer from “banner blindness,” a retraining of brains and eyes to completely ignore advertising content while browsing online. It’s a widespread phenomenon of behavioral adaptation, proven time and again by eye tracking and heat mapping technology, which is already causing significant waste and is a real threat to the future of the entire display industry.

The display advertising industry can’t continue to operate under such dismal numbers. If display aims to survive for the long haul, especially in a media environment that evolves much faster than it did even 20 years ago, it will have to adapt to the way people currently consume media, rather than clinging to legacy methods.

At its core, banner blindness considers our ability to automatically tune out what is expected. As such, the way to overcome banner blindness lies in the unexpected. According to the eye tracking study Infolinks conducted in partnership with EyeTrackShop, non-traditionally placed ads targeted by user intent were noticed more, seen more quickly and engaged consumers longer than standard ad units.

In addition to shaking up the usual placements and formats, advertisers must make relevance their number one priority. Sixty percent of our study respondents said they don’t find traditional ad units relevant; however, when presented with an ad for a brand that was lesser known but related to the page content, 82 percent more respondents recalled that relevant ad.

In-stream advertising, or advertising delivered within an ongoing content feed, is an extremely effective approach to improving ad relevance. In-stream advertising accomplishes the task of being both unobtrusive, as it is designed to appear as part of the organic flow on content, and engaging, as it is also designed to be both relevant to the user and the content of the page.

22 percent of our study respondents stated that the last ad they saw was so irrelevant that it annoyed them. In addition to the bad business practice of annoying customers, the money spent on those irrelevant ads could was ineffective. And as we’ve already noted, those wasted dollars amount to billions.

So how do we stem the flow? First and foremost, it is vital that advertisers shift their focus from their own message to the user experience; creating positive and unobstrusive, yet useful experiences for the user while presenting their messages. Additionally, diversifying both placement and format of ads will attract more attention and be more likely to engage the user.

Finally, relevance is key. Ads must be relevant to both the user and the content of the page. Layering contextual data on top of behavioral and demographic data helps ensure that ads are not only reaching the right consumers, but also reaching them at the time when they will be most receptive to the message.

The banner blindness epidemic is a severe threat to the display industry; a modern problem to be dealt with using modern methods. It’s not about making ads prettier or flashier; it’s about making them smarter.

One Response to “How the Display Industry Wastes Billions of Dollars on Ads That Don't Work”

  1. Mark Osborne says:

    I appreciate the article and agree as marketers we should always strive for more relevance, but measuring banner ads only by CTR is a pretty narrow way to measure effectiveness...but it's still a point well taken.

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