Online Display Ad Effectiveness: Skepticism Persists

Online Display AdvertisingAs the variety of options for online advertising have steadily increased over the years, the reputation of display advertising effectiveness has suffered. Part of this is in the statistics: abysmal clickthrough rates on many online display ads with percentages that trend toward the microscopic.

But another part is just plain intuition. People understand that when folks go online, they’re usually on a mission – whether it’s information-seeking, looking for products to purchase, or avocational pursuits.

Simply put, the “dynamic” is different than magazines, television or radio — although any advertiser will tell you that those media options also have their share of challenges in getting people to take notice and then to take action.

The perception that online display advertising is a “bad” investment when compared to search engine marketing is what’s given Google its stratospheric revenue growth and profits in recent years. And that makes sense; what better time to pop up on the screen than when someone has punched in a search term that relates to your product or service?

In the B-to-B field, the knock against display advertising is even stronger than in the consumer realm. In the business world, people have even less time or inclination to be distracted by advertising that could take them away from their mission at hand.

It doesn’t take a swath of eye-tracking studies to prove that most B-to-B practitioners have their blinders on to filter out extraneous “noise” when they’re in information-seeking mode.

This isn’t to say that B-to-B online display advertising isn’t occurring. In fact, in a new study titled Making Online Display Marketing Work for B2B, marketing research and consulting firm Forrester Research, Inc. reports that about seven in ten B-to-B interactive marketers employ online display advertising to some degree in their promotional programs.

And they do so for the same reasons that compelled these comparnies to advertise in print trade magazines in the past. According to the Forrester report, the primary objectives for online display advertising include:

 Increase brand awareness: ~49% of respondents
 Lead generation: ~46%
 Reaching key target audiences: ~46%
 Driving direct sales: ~41%

But here’s a major rub: Attitudes toward B-to-B online display advertising are pretty negative — and that definitely extends to the ad exchanges and ad networks serving the ads. Moreover, most don’t foresee any increased effectiveness in the coming years.

That may explain why Forrester found that fewer than 15% of the participants in its study reported that they have increased their online display advertising budgets in 2011 compared to 2010 – even as advertising budgets have trended upward overall.

When you look closer at display, there’s actually some interesting movement. Google has committed to a ~$390 million acquisition of display ad company Admeld. And regardless of the negative perceptions that may be out there, Google’s Ad Exchange and Yahoo’s Right Media platforms have created the ability for advertisers to bid on ad inventories based on their value to them.

Moreover, new capabilities make it easier to measure and attribute the impact of various media touchpoints — online display as well as others — that ultimately lead to conversion or sales.

But the negative perceptions about online display advertising continue, proving again that attitudes are hard to change — even in the quickly evolving world of digital advertising.

3 Responses

  1. Okay, I’m a geezer. I’ll admit it. So maybe my opinion about online marketing is worthless. But…for what it’s worth:
    I’ll concede that Google Adwords, when competently executed, is worth the effort. But I’ve never made a dime on online display, except when I’ve been able to get the cost per thousand impressions down to near a dollar. That’s hard to do. And then there’s Twitter. I heard a guy on the radio talking about using Twitter to brand. But if you don’t already have a brand, nobody reads your tweets. The only way to build a brand with Twitter, as far as I can tell, is finding somebody with an existing brand to do your branding for you, i.e., to tell his/her followers your product or service is cool. If you want to build a brand, TV is hard to beat—spots and product placements. Just ask the pharma giants (they’re technically B to B). Even radio can help get the job done—nobody talks about radio anymore, but terrestrial radio still has a huge audience. A prestigious paper or periodical can convey credibility. (I’ve quintupled my money in the NYT.)
    But everybody wants to hire online gurus. For some companies, I’m sure that makes sense. But for so many others, I think it’s time to take another look at traditional media.

  2. […] common knowledge that clickthrough rates for online display advertising are abysmally low. But what transpired in the ARF-led team’s ”nothing-doing” ad campaign was […]

  3. […] also why, despite the well-known negative aspects and limitations of web display advertising, nearly half of the respondents in the Bizo/Oracle Eloqua survey feel that online display […]

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