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The Decline of Display Ads: Stop Distracting & Start Attracting

Michael Becker
Michael Becker

If you haven’t already started to rethink your display advertising strategy, now is the time to begin. Though overall spend on traditional online display is still slowly climbing, it is declining in terms of percentage growth.

Investment in display advertising – despite an apparent increase in dollar spend – is growing at a declining rate, slowing significantly by 2022. 

Effectiveness is also waning. So, if you want to continue iterating and optimizing your customer acquisition efforts, you’ll need to adjust in-kind with more targeted, more effective kinds of marketing.

As marketers, we need to begin to figure out new ways to hang alongside — or work with — Google and Facebook, who, together and for the last couple of years, accounted for the majority of all digital ad revenue growth in the U.S.

For all intents and purposes, Google and Facebook have a duopoly on the digital advertising market.

For everyone from media companies and publishers to e-commerce or consumer brands, there’s no avoiding the inevitable and no denying consumers’ sentiments about traditional, disruptive banner ads: they just don’t work anymore. Ad blocking is easier than ever. Display ads inhibit a smooth web browsing experience. They’re annoying, interruptive, and intrusive, and their rate of return is next to nothing.

As traditional banner ads continue to dwindle and eventually evaporate, what will rise up in their place? What should marketing organizations begin to do in lieu of fueling the fire of “banner blindness?”

Traditional Banner Ads: Just Say “No!”

Archaic banner ads — mainly when run on third-party websites via a standalone ad tool — are like a bad (banner ad… get it?) drug – they’re addicting as heck to continue to invest in because we’ve “always used them” (many e-commerce teams literally set aside a portion of the budget for “programmatic” or “banner” ads), they aren’t actually helping us (they’re hurting us), and you get what you pay for (an overall shotty consumer experience).

“The effectiveness of banner ads peaked the day the first banner ad was made… and they’ve been declining ever since. Even without an actual ad blocker, our brains filter them out. It’s called banner blindness. Why are native ads so popular? Because alien ads aren’t seen or trusted.”

 

 

Andy Crestodina • Co-founder/CMO, Orbit Media Studios & Marketing Author, Speaker, & Thought Leader • @crestodina

“The effectiveness of banner ads peaked the day they were created… our brains filter them out!” says @crestodina       CLICK TO TWEET

Consider these points:

  • The average click rate on a traditional display ad in the U.S. is 0.8%.
  • 50% of clicks on banner ads are accidental – and assuming you want to actually convert those who take kindly to the impression and do click, the hard part still must be done.
  • The average display ad gets just 4 people out of 1,000 to do anything remotely valuable.
  • You’re creating self-inflicting wounds on your brand with typical banner ads. 99.6% of people who see them come away with an indifferent or negative view of the ad and the brand that places them.

The cross-functional task of executing mass online display ad campaigns, too, just doesn’t make much sense anymore.

“The process of putting together an ad campaign, studying your demographics, and then pushing it out repetitively is dying. Expectations of digital ads are dying, too, not just the performance of the ads themselves.”

 

 

Bob Dunn • Host, BobWP eCommerce Show •  @bobWP

“The process of putting together an ad campaign – & expectations/performance of#digital ads – are dying,” says @bobWP      CLICK TO TWEET

If there’s a better way to completely alienate your core audience than one-size-fits-all, irrelevant, noisy banner ads, I can’t think of it.

Why Are Banner Ads so Ineffective?

Yes, in short, banner ads once had a significant role in driving decent traffic as an integrated component of a digital marketing approach.

Ad Blockers: Friend or Foe?

Google’s dominance of search and web browsing has, de-facto, given them a near monopoly on the digital ad market. For marketers, this can be both problematic but also beneficial, if we can re-focus our approach. Nonetheless, more consumers have been vying for ad-free browsing experiences.

So Google Chrome now has a built-in ad blocking system that prevents users from seeing ads that violate their Better Ads Standards from displaying in-browser – whether this project is beneficial or bad from an industry perspective remains a topic of discussion and of perspective.

Their ad blocking plug-in (and other independent plugins) eliminates intrusive ads we all hate: auto-players with sound, countdown ads that make you wait 10 seconds to get to the site, large “sticky” ads that remain constant even when you scroll down the page, and the like.

Chrome can block ads including (but not limited to) prestitial and flashing ads as well as auto-starting videos or sounds. These new standards aim to improve the web experience of all web users (Coalition for Better Ads). Since 2017, more than 200 million desktop and more than 400 million mobile users have installed ad blocking software on their devices. Additionally, 93% of millennials (the most lucrative consumer segment) will consider using ad-blocking software (Unruly, 2016).

Most consumers block ads because they cover the entire webpage, decrease load time, and are intrusive. Source: MarketingSherpa

Articles and listicles all over the Internet perpetuate, for consumers, the annoying nature of ads and invite them to install ad blockers. And honestly, based on the poor execution of unpersonalized display ads I still see today, who can blame them? Juniper Research points out that publishers could lose as much as $27 billion in revenue by 2020 due to ad blockers – nearly 10% of the cumulative digital ad market spend.

But, not all is lost — not even with regard to online advertising! As Charlie Stewart, CEO of Rogerwilco wrote, “though digital display advertising is on its way out, there are other ways to create authentic engagement and dialogue between brands and their audience.”

Even if old banner ads are doomed, your digital marketing strategy isn’t. There is a way to rework what you’d call existing banner ad campaigns. Instead of shooting yourself in the foot by running them rampant across the World Wide Web, more e-comm teams are turning to smarter, more optimized,  more personalized CRM display ads – retargeting existing database contacts via GDN, building lookalike segments, and leveraging smarter social media advertising… plus looking to other owned channels.

Alas! There is a Solution — Personalized (Permission-Based) Marketing

Building your brand and pushing product can be accelerated by shifting your online display efforts from buying reach and impressions to using the assets you already have – first-party data, your website, and better tech – to make use of your “owned intelligence.”

In short, tell an omnichannel story based on who each individual is. Create 360-degree experiences that fully-immerse your audience. Interactive, omnichannel campaigns see more engagement and better brand recall.

“Banner advertising is dying because people are weary of getting sold at. Banner ads are like car salesmen loudly shouting about price slashing and features, without listening to hear what [the customer] is looking for. I hope more and more advertisers… showcase companies’ more human side.”

 

 

 

Alexina Paiement Creative Designer

Consumers don’t have a distaste of ads, just of annoying ones. Therefore, the future of advertising is true personalization. Catering to each of your customers’ preferences with recommendations and predictive marketing that’s served up based on their shopping behavior is the path to increasing conversions… in short, smart retargeting and management of your owned communication channels. 

Social Media

The easiest shift to make – which is a figurative “turning of the wheel” with your old display ad approach – is to invest more heavily in social re-targeting ads.

It’s hard to argue the point that basically everyone is on social media. It’s also easier to create native posts where your ads appear less like ads and more like shares, posts, tweets, or in-stream sign-up forms.

Whether on Facebook, Instagram, Snapchat, Twitter, LinkedIn, YouTube, or others, you can retarget existing or lookalike customers with relatively light spend via social advertising.

In a sea of banner blindness where you’re paying for facetime on websites you may not even know, why not switch it up and start targeting customers where they are? Strategic, customized social ads (which can also be automated) created for GDN, Instagram, and Facebook, specifically, are the best and easiest pivot to make, here.

Mobile – In-app

If you’re still spending money on CPM-based display ads or banners, you’re throwing away valuable dollars. This network model works if all you want is scale and impressions, but not for relevancy and 1-to-1 messaging. You need a way to deliver more native experiences in a scalable way via mobile – ideally on your owned land.

AHA! Your mobile app is actually an under-the-radar and highly effective venue to serve up right-time, right-place notifications where users are already engaging with you.

These in-app banners can serve a multitude of purposes including pointing app users toward a deal of the day, a personalized coupon code, or a new product. Here, you can control timing, content, data collection and engagement information, and more right in your own backyard.

Email

I don’t have to reiterate the effectiveness of leveraging email.

However, investing dollars in your email marketing – on personalization tactics, new technologies to send emails at different times for each recipient, and more – where you’d previously been throwing them at online display just makes sense.

Ownership is perhaps the biggest benefit of email. You don’t own the mass of people who see your banners on third-party websites; but you do own your email opt-in audience, along with their preference data.

That’s It! Enough About Display Ads

There’s no doubt that the global advertising marketing is rapidly shifting. Programmatic, display, and traditional ads are declining in effectiveness. Traditional digital ad spend categories are halting to all-time lows. It’s not a question of is, but when, display ads will become completely irrelevant… if we’re not there already.

The question isn’t whether you should still allocate dollars toward online display, it’s how to adapt to the rapid decline in effectiveness of this format of traditional advertising. It doesn’t work anymore.

Instead, create more personalized, targeted advertising that actually makes your customers feel as if you know and care about them as individuals. Working with permission-based channels including social retargeting, mobile, and email marketing can help you make that foundational shift that needs to happen if we are to be successful and resurrect our consumers’ faith and trust in the marketing they interact with. ◾

Check out our whitepaper which addresses this plus 4 more big predictions for the next 5 years, here: 5 Marketing Predictions for the Next 5 Years.

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About the Author


Michael is a content marketing, audience development, and customer experience fanatic. As Digital Content Manager at Emarsys, Michael helps manage the content hub where he and his team create helpful content for e-commerce and digital marketers. Michael is a published author on industry blogs including Forbes, Convince & Convert, and JeffBullas.com. He resides in downtown Indianapolis.

Connect with Michael: LinkedIn@mjbecker_

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