Rich media hype and the future of online advertising
Rich media hype and the future of online advertising
There have been a lot of people lately talking about the end online
advertising and that banner ads don_t work. Click through are lower than
ever, confusion and fear are on its 52-week high. I have been reading a lot
that currently online adverting doesn_t work because of bandwidth
constrains. All this negative thoughts about online ads are getting me very
angry. These people that are downgrading online ads are those who don_t know
how to use the Internet efficiently. The most common argument is that
banners don_t work. They say that banners don_t work because the average CTR
is declining steadily. I see three main reasons for the CTR decline:
- People see the banner, open a new window and type the domain name of the
advertiser.
- People see the banner, recognize the company that are advertising and go
to the advertiser site in another day.
- People are getting used to see banner ads.
The first two reasons are very positive but the last one seems to be bad,
don_t you think? Wasn_t it better when people didn_t know banners very well
and the average CTR was 5%?
My answer is NO. CTR has very little correlation to a campaign ROI. If you
don_t track post-click and non-click data, and you are on a direct marketing
business, you can_t measure the effectiveness of your campaign. Let_s not
forget the Adknowledge study that proves that CTR is a poor indicator of the
success of a campaign. And lets not forget either the studies that proves
the branding power of the banner ads.
There are a lot of rich media companies marketing their new technology
saying that their banners bring higher CTR than gif banners and the gif
banners are dead. But this increase in response rate is transitory. Remember
when animated gif banners first appeared?
People are clicking more because they are curious. They are seeing something
that they never saw before. This does not mean that they are willing to buy
your products/services. Strong animated rich media banners make it difficult
to read the site_s content so it is counterproductive. I am not saying that
rich media banners are bad at all. I am just saying that the future of
online advertising industry don_t depend on them (like many likes to say)
and they are not very useful today because of bandwidth constrains.
In the direct marketing business the goal of the banner ad is not to be as
sexy as possible. To goal is to be informative enough to attract the right
customers (high LTV) to your site. The key is to test your banner in a lot
of Web sites (small buys). Then you segment your customers. Find out which
placement brings you the most valuable customers and then buy more inventory
on these winning placements. Keep segmenting your customers and checking
which Web sites is bringing the gold customers to your business.
If the banner is built for branding, the goal is not to be as sexy as
possible or to have the most incredible technology (unless you are HP and
you want to associate your brand with innovation). The key is to place your
banner in a great position in a highly regarded and targeted Web site. That
way you will be associating your brand with a trusted source and will be
communicating your message to the right audience (great reach).
Doing the right thing and measuring ROI wisely you will notice that in most
cases gif banner ads can be a fantastic choice. It is not a matter of
sophisticated creative (like many rich media companies want you to believe).
It_s much more a matter of placement, relevance and measuring ROI using
post-click and non-click data.
Bandwidth is not a problem for the online advertising industry. Gif banner
ads are great! When people leave this obsolete click-through paradigm aside
and start measuring online ads ROI more wisely we will see another
exponential growth in the online advertising industry.
Leonardo
Received on Fri Feb 09 2001 - 15:23:38 CST
