Display Advertising: Working or Not?

A recent study by C3 Metrics reported that online display advertising accounted for 44% of advertisers’ transactions in Q1 2011. C3 was apparently able to study some 50,000 online transactions and found that display ads drove the initial awareness of the brand.

When you add that on top of the latest eMarketer report that the U.S. display market will increase by 24.5% this year to $12.3 billion, you’d have to think that display advertising has finally come of age, right?

Not if you read what most of the experts say. Or if you talk with anyone you know who surfs online. Here are a couple of the “nicer” critiques from Rob Gatto of Pointroll and Mitch Joel of Twist Image. When creatives talk about display, it gets uglier.

When was the last time anyone asked you “Did you see that banner ad today on the New York Times.com?” If they ever did, it was probably when Apple was rolling out its Mac vs. PC ad online. Otherwise, no one is talking about, albeit remembering most online ads. That’s because most online ads lack the creative juices imbued in other ads, like print or TV.

That’s too bad, because there’s lots of room for creativity here once you start looking at this format differently.

Most people aren’t. Here are a few examples of today’s display ads from some of the leading sites.

Yahoo.com

LA Times.com

Washington Post

My Favorites - Burlington Free Press


Now, these are just ads I found on the home pages today. Most are pretty bad. The LL Bean one at least makes me want to look at it. It wasn't until I visited YouTube that I saw an ad that made me want to watch and interact with it.

YouTube

Now maybe some of you will say I'm only seeing these lousy ads because I'm being retargeted to (that's when advertisers cookie your browser when you visit their site. Afterwards their ads follow you around the Web like something stuck to the bottom of your shoe). That's not the case, though. I am being retargeted, mostly by companies I'm already a customer of and have already made the one purchase I'm going to make from them.

What do you think? Are these good ads or bad ads? Or is the only way to judge them based on clicks or conversions? I think it's both creativity and results, not one or the other.

As I’ve noted before, there aren’t a lot of sites promoting great banner creative. Even on my favorite, Banner Blog in Australia, I’ve noticed much lower quality and creativity than I’ve seen in the past.

The data shows display works better now. Maybe it does. But the format and content still need a lot of work.

 

Buying Impressions vs. Making Impressions

This last week has seen a rash of good news for online advertisers. Sites like the Daily Beast, Digg and Twitter are ramping up alternatives to the sorry state of online display advertising. Hopefully this will move us away from the old media habit of buying impressions toward a place focused on making impressions instead.

Since most display advertising has poor creative and predictable placement, it’s easy to ignore. While adding rich media and creative thinking that takes advantage of the technology helps, it might be too little too late.

The Daily Beast has now embarked on a path of custom advertising integrated more closely with its content. This sounds pretty exciting, although it would be good to hear how easy and scalable that is. That’s one of the advantages of the current display model: you don’t have to custom build creative for a gazillion different sites. Hmm, maybe companies like Adroit should take note.

But the concept is spot on and similar to some ideas we’re testing out as well. I can’t wait to see the first results from these types of ads.

Digg is also placing ads into its content stream and letting people vote on whether they think its good advertising or not. Hurray for Digg, finally letting people have a say in this is a good thing. Surprisingly, this may have the affect have making more people pay attention to the ads, even if they stink.

While Twitter got a lot of negative Tweets about it’s pay-per-Tweet idea, you’d be hard pressed to make a case that those tweets are going to be worse than many in your current stream.

Each of these approaches focus on content in content areas and we’ll see winners emerge who provide the greatest relevancy. At the end of the day, it’s about making impressions with the people who want to talk with you rather than buying impressions to bother people who don’t want to talk with you.

One thing we need now is a pricing model that reflects that.

IAB Stimulus Plan

The IAB is hard at work trying to solve the Online Advertising problem. The problem? Most of it is no good. The good people at the IAB will try to implement standards and inspire creativity.

In the spirit of collaboration, here’s my suggestion for on online advertising stimulus plan. Long on ideas, short on dollars.

1. Start With an Engagement Plan – Remember this is a two-way medium. You can’t hide behind space requirements and sizes to excuse the creation of animated billboards. What do you want people to DO? And for this part of the exercise, remove the word “Click” from your vocabulary. There are lots of things you can do within the ad itself. Is your engagement plan browsing? Or is it creating? Or is it requesting or even buying? People on the other end aren’t robots. Watch and click is good for automatons. Map out an engagement plan before you start developing the creative.
2. Stop Thinking “Ad” – Just because we call it an ad, and buy placement like an ad, it doesn’t have to be an “ad.” Think instead widget, microsite, or application. An online ad can be all of those things. And those are much more interesting than an ad. That’s the beauty of the online medium; that ad can be anything you imagine it to be. Remember, we’re interrupting people doing something else. If we’re going to ask them to engage with us, we should provide the most meaningful and robust engagement we can.
3. Leverage the Technology – The online ad space can do pretty much anything these days. You can buy stuff right from an ad, you can connect databases to it, you can let people customize things it in, and you can figure out from where people are watching your ad. The technology allows us to make things more personal. It allows us to pull from content from different places online and feed content back to those places. The best part is, we don’t have to create a lot of this from scratch. Third party vendors like Eyeblaster, Adroit and Adgregate can help.
4. Focus on Fewer Sizes – Size does matter in online advertising, especially for budgets. Online pubs try to sell as many different sizes as possible to get rid of inventory. Media buyers buy these sizes in packages to, presumably, keep costs lower. However, all that does is raise production costs. And it pushes sizes that usually don’t perform that well. So take a stand. If you’re going to do something engaging, something that will take time to craft and do right, don’t spread your budget on producing a gazillion different sizes. Pick two and go with them. Usually the pubs or the third parties can tell you which two sizes clearly outperform the others in any given category.
5. Connect It  – Online advertising can’t exist in a vacuum. Make sure there are other robust contact points that connect with your online ad. It could be your Facebook page, a microsite, Twitter, or an iPhone app. Make sure that you connect all of these back to clear conversion paths, so when the person on the other end is ready, your company is ready too.

Yes, more money would help. I agree with Mike Shields at Mediaweek, a small shift in TV budgets to online budgets could help create something new. But it’s not only the money.

It’s not that difficult. It just means we have to stop looking at this online marketing opportunity as “ads” and start delivering the promise of the digital medium.

Display Ads and Search

Ad network Specific Media just released a study showing the impact display advertising has on search. Over a 12-month period, Specific Media was able to show that display advertising had a positive effect on both paid and organic search, increasing search activity by an average of 155% (with variations in different categories).

Apparently Specific Media had by comScore back the data. Otherwise it might look like the study was too self-serving. After all, Specific Media makes its money selling display advertising.

We’ve been seeing smaller studies like this over the years. As digital marketers we continually bring this up when clients ask us for “industry standards.” But this is the first time the numbers are so clear for both PPC and SEO.

The study doesn’t show, however, how the display ads themselves performed when supported by paid search campaigns. Now that would be great data to have.

While the results seem clear, the message to CMOs is not. In fact the study seems to imply that the best way to measure display advertising is through awareness rather than through its own results. It acts indirectly and not directly. Yet a lot of the criticism about display advertising comes from its lack of direct, measurable impact.

What’s more, we see the same types of arguments made on behalf of Television advertising. It makes sense, then, to push for integrated campaigns that work together to make the sum of marketing greater than its parts. For digital marketers we have to find a way to make this argument to our clients in a way they can understand.

On the other hand, it seems like a total cop out for display ads. I’ve said it before, if agencies can only make crappy banners that can’t work on their own and only increase awareness, then clients need to find someone who can make banners work they way they should.