-
Website
http://tangerinetoad.blogspot.com/ -
Original page
http://tangerinetoad.blogspot.com/2009/10/stubborn-mule-like-tendencies-of.html -
Subscribe
All Comments -
Community
-
-
Top Commenters
-
Popular Threads
If you buy a print ad at a $20 CPM and get a $50 cost per call, you're doing OK in many product categories. Think on that. $50 spent = 2,500 impressions = 1 response. A 1/2,500 response rate. And a print advertiser is happy!
If you buy a banner ad, the average response is 0.10% CTR ... a 1/1,000 response rate. That's performing 2.5 times better than print. And this is bad? Now -- follow the math here, Alan -- consider you can buy banners on ad networks at $2 CPMs, 90% less than the cost of $20 CPM print ads. Suddenly the response is 25 times more favorable per dollar spent.
So yes, it is easy to knock banner CTRs as a stupid metric, and to look at the 999 out of 1,000 viewers who did not respond. We can look at history and think back in the days of 1999 banner CTRs were 2.0%, 20 times higher than today. But truth is, apples to apples, banners perform only as badly as many other forms of advertising, and yes, often much better than print. If I had $1,000 to spend and could predict that banners drive 25 times the responses of print, I'll put the money into banners every day of the week.
Rather than looking at anemic response rates as a sign that banners don't work for direct response, we should admit most advertising is never seen by viewers (it has to register on you retina before reaching the mind), and that most seen are not responded to. But if the number of responses makes economic sense, then the campaign can succeed.
Direct response dynamics are certainly an appropriate way to measure the effectiveness of advertising. Google is priced solely on clicks (no one counts the vast impressions of Google Adwords that do not receive clicks), and Google receives about half of all online ad dollars. I'd say it's success indicates tracking and improving CTRs is an important metric.
It's not what doesn't work that matters. It's the portion that does, and whether it makes fiscal sense. Advertising has always been problematic ... responses need to be converted to sales, and the process can break down at numerous steps in the funnel. But to slam banners because most people don't see them or don't respond is a bit silly, because that's the nature of advertising in general.
Thoughtful post, but I do feel compelled to defend those pretty colorful boxes ;)
Two questions:
1. Are the stats you're citing fairly consistent across industries and
types of products/services?
2. Can a distinction be made between banners than function as DR
vehicles (e.g. contain a specific offer such as "click here to
download a $10 coupon") vs banners that function as animated print ads
whose sole call-to-action is something to the effect of "click here to
learn more?"
Two questions:
1. Are the stats you're citing fairly consistent across industries and types of products/services?
2. Can a distinction be made between banners than function as DR vehicles (e.g. contain a specific offer such as "click here to download a $10 coupon") vs banners that function as animated print ads whose sole call-to-action is something to the effect of "click here to learn more?"
For (2), I believe responses are relatively consistent despite banner offers. Creative can drive ranges in response of course, but usually tied more to clarity of message (do you get what it's about in 0.5 seconds). The rule "Don't Make Me Think" seems to apply best in banner design. If a consumer gets what the product is about and it seems appealing, you'll trigger a click if she is interested. Nuances such as coupons etc. are too complex to be registered in that half-second.
The real swing in results comes after users click on the banner; conversion rates on the landing page are the pinch point we've seen in most campaigns. I'd advise most clients to dig in here, streamline lead forms, add click-to-call, and perform basic split testing of messages or offers on the landing page to jack up conversions, which can have a 20:1 range.
To be fair to your thesis, banner CTRs are down twentyfold in the past 10 years. Consumers are tuning out. And disreputable ad networks, often those that charge on a cost-per-click, use crappy tricks to try to get you to mistakenly click on a banner (think FoxNews banners that expand suddenly in the top right over the news items as you hover your mouse about to click on an article).
The only hope I see for the entire industry is to do less is more, similar to Hulu's approach with limiting ad inventory. If you could run a few highly visible banners and make them relevant with behavioral targeting or contextual targeting, you might build a better mousetrap. Consumers are pretty sharp, and if it is just an interruption, well, 99.9% will continue to look away...
After all, in our younger days we were proudly pitching Flash sites, comping up banner ads and griping about clients who invested in quickie homepages and microsites instead of the massively integrated stuff we really wanted.
The other accounting that often gets lost are view-based conversions. The likelihood of someone clicking all the way from a banner through to purchase is remote (although I did yesterday with legalzoom.com for a simple document). Attribution for view-based conversions varies by company, but every campaign I've run with tags in place shows a lift in conversions for weeks after the campaign.
Connecting all of this is hard damn work. Too much for most.