David Meyer

The Evolution of Banner Ads

Remember in the late 90’s when all anyone talked about was ‘eyeballs’? That was the (really stupid) rationale to invest in dotcoms based solely on the traffic the site would generate (even if the site operated at a loss). It was the reason companies had insane valuations and no real, sustainable revenue model.

November 12, 2018

Not so long ago, the banner ad was an industry joke. Sure, there were incremental improvements; the animated gif, interactive ads and site (and commerce) integrated banners. However, it still seemed as if their revenue model was based primarily on a visitor accidentally clicking an ad (and closing it immediately, angrily).

Then there was the dreaded pop-up.

But in true ‘evolve or die’ form, the banner ad has changed with the times, and is actually something agencies can recommend without embarrassment. According to eMarketer, display advertising is expected to grow faster than all other types of advertising this year, and eclipse search advertising in 2015 [1]. Retargeting, hyper-targeting, semantic targeting and pre-video ads are proving very successful as awareness and efficacy is up, and supply is actually limited (thanks to political ads).

According to a recent New York Times article (October 11, 2014), inventory in key markets has been snatched up in hot Senate battleground states like Iowa and Colorado, driving up prices and making inventory scarce. Who’d have thunk it?

For the uninitiated, retargeting gives advertisers the ability to display ads (or specific versions of ads) to people who have visited their site, or who have shown interest in certain products. Think of it as a way to stay in touch with “lost” prospects. These ads are effective not only because they’re targeted to a prospect that’s shown interest, but they also break through the clutter – prospects recognize the product/company. Even if they don’t click to buy, their awareness increases. According to a study done by comScore, retargeting prospects resulted in a 726% increase in site visitation within four weeks of the initial ad exposure [2]. This translates to retargeting being the most effective form of getting prospects to return to your website.

For me, personally…this type of targeting has created some awkward moments. As a writer, I have to do a lot of research. When researching STDs for ANY LAB TEST NOW, I found myself bombarded with ads for ‘discreet testing’ and clinics. I continued to research, but prayed my wife didn’t borrow my computer. Heaven only knows what Google thinks of me.

Hypertargeting is the ability to focus in on one specific type of customer segment based on age, location, interests, etc. The more you know about your prospect, the more effective your campaign. Facebook and LinkedIn are great examples of this. If our client wants to target CIOs in the greater St. Louis area – done. If they want to target fans of the LSU Tigers – bam. If they want to run a pre-video spot to IP addresses not currently subscribed to their site – voilà. There are even services that cater to advertisers targeting tradeshow attendees by focusing on IP addresses around the show (the venue, nearby hotels, etc). The trick is to tailor your ad specifically to a very narrowly defined audience.

Semantic targeting allows advertisers to display their ads based on the content of the site, increasing the relevancy of the message. This provides added context for the ad, and helps to ensure that the target is likely more qualified.

Other publishers are trying to disrupt the category entirely. A great example is The Financial Times. Currently, they’re selling display ads by time, similar to how advertisers purchase broadcast ads. The FT knows that when key data and reports are released, subscribers will flock to the site. By purchasing ‘time’ instead of simply ‘eyeballs’, advertisers are ensured that their ad will be seen by precisely the audience they want– when it’s most relevant.

Banners on mobile are still evolving, as the smartphone industry is still in its relative infancy. The best example of advancement in this space is geotargeting – giving advertisers the ability to push their message to the desired target when they are near their store (often offering discounts), or when there is a time-sensitive product with unsold inventory (i.e., event tickets). The click-through rate for geotargeted mobile advertisements can be up to 300% better than the industry average, according to a study done in 2013 [3].

Underlying all of this is the content industry’s reliance on third parties and income from banner ads. Just a couple of weeks ago, the largest ad server for publishers, Google’s Doubleclick, was down for over an hour, leaving (glorious) white space where revenue generating ads should have been. Publishers lost an estimated $1MM in revenue per hour [4]. Add to that that their ad server, something completely out of their control, often hampers the ‘load time’ for a site. This can lead to frustration and poor user experience by visitors, some who may never return. After this most-recent failure, many publishers are scrambling for fail-safe plans to avoid losing revenue and traffic.

Changes are afoot with regards to advertiser demands, too. After years of frustration, large media companies are developing new standards and guidelines to ensure that ads are actually seen by the target audience. Ads can no longer just ‘load’ and be counted. Buyers are demanding that ads must be 100% visible, and firms have been engaged to audit adherence to their standards. This is just the beginning.

To butcher Thoreau, online advertising has gone from astrology to astronomy. I for one am excited for my trip to Mars…


[1] http://www.emarketer.com/Article/How-Will-2013rsquos-Digital-Display-Trends-Converge-2014/1010613

[2] http://dl.dropboxusercontent.com/u/7753809/comScore-Media-Placement-Strategies.pdf

[3] http://www.vervemobile.com/pdfs/verve_retail_report_w.pdf

[4] Business Insider, November 12, 2014

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David Meyer

There are a lot of great story-tellers, but there aren’t enough story-understanders. When clients have trouble explaining a new value proposition, David can name that tune in fewer words than they imagined possible. When prospects come to us with a symptom, David asks the (sometimes hard) questions that get to the root of the problem. Then he solves it. After decades inaccount management and creative roles, David is able to bridge the gap between creatives and clients (and back). Oh, and he can tell stories, too.

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