Why Display Ads Fail

Why display ads fail
Engaging website visitors and monetizing your site requires something better than display ads.

The early paradigm for web advertising was established back when dial-up was prevalent and pages were crammed with links in order to reduce server calls and speed information access. In today’s world of high speed connections, however, those old, clunky designs are not necessary. Pages can be more streamlined and eye-pleasing. This should make display ads more noticeable and more effective, yet display ads still don’t work very well. Here are five reasons why.

1. Clickthrough Rates Remain Dismal

Average clickthrough rates (CTRs) for display ads are around 0.1%. That means for every 1,000 times an ad is displayed only one person clicks on it. CTRs also vary according to geography, with Malaysia having the highest average CTRs (around 0.3%) and Finland having the lowest (around 0.05%). Low CTRs indicate that a lot of money is still being invested in display ads although they are actually weak vehicles for branding. In general, the more focused and targeted the ad, the higher the CTR, but highly targeted ads aren’t great for brand building.

2. There is Still No Cure for “Banner Blindness”

Back in 1997, researcher Jakob Nielsen used eye tracking to show that people simply ignore display ads. This phenomenon, known as “banner blindness,” is a psychological phenomenon called selective attention. If an environment (in the real world or on a screen) contains too much stimuli, humans are wired to only notice things that are important. After seeing enough display advertisements, the human brain quickly learns to ignore them. When new display ad formats come out, CTRs go up temporarily, but banner blindness quickly kicks in again.

3. Ad Blocking Software is Popular, and it’s Going Mobile

AdBlock Plus launched an Android version of its iconic software in late 2012. Mobile AdBlock Plus blocks ads on mobile browsers and other mobile apps, including Facebook. More than 50 million people have downloaded AdBlock Plus for the PC to block pop-ups and display ads on websites. Only 2% to 3% of US users have AdBlock Plus, but that still represents tens of millions of people. Now AdBlock for mobile devices is throwing an obstacle in front of those who buy mobile display ads.

4. Banner Ads Aren’t Emotionally Engaging

Banner ads are generally too small to build brand awareness, and they’re too simple to emotionally engage web audiences. Unlike television ads, which take up the entire screen for half a minute or so, display ads on websites are small and easy to ignore. Many types of traditional advertising don’t translate well to an online environment. When media publishers try to duplicate traditional advertising online they quickly discover that display ads are expensive and rarely deliver.

5. Display Ads are Sometimes Placed Inappropriately

Have you ever “liked” a Facebook post skewering a political figure you dislike and then been inundated with ads for that very candidate? Sometimes display ads aren’t executed well and pop up in inappropriate places. For example, an airline ad may pop up on a news article about a plane crash. Even when such ads break through banner blindness, they’re seen as tone deaf at best and exploitative at worst. While there are companies that track banner ads to try and prevent these situations, they can’t catch all of the inappropriate placements.

Fortunately, Sites Can be Monetized in Other Ways

There are much better ways to monetize websites today than with display ads. Trade publications have had better success by using job board software advertising jobs relevant to their trade than with display ads that rarely earn their keep. For example, an online health trade publication can monetize its site far more effectively if they create a job board targeting health professionals than if they rely on display ads.

Monetizing trade publishing websites can be a challenge, but recruitment advertising solutions like job board software is proving much more satisfactory than display ads, attracting employers and job seekers alike.

Photo Credit: janniechien

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