Google Study Finds Web Banners Ineffective

August 31, 2011

On Saturday, one reader sent us a link to this story: “Is Google’s Search for Quality Content a Ruse for a Massive Diversion of Cash to Its Own Sites?” We are not sure if the points in the write up are spot on, but the theme of the article connected to another story we noticed.

According to a 2010 survey by Google, the average click through rate for banner ads this past year was 0.09 percent which is down from 0.1 percent in 2009. This decrease leads me to believe that attempts to make banner ads more inviting to potential customers are failing miserably. However, the article Google: Click-Through Rates Fell in 2010 [Study] states:

[The study] found that the format of a display ad can make a difference. A 250×250 pixel ad using Flash got the highest CTR of any format — 0.26%. The worst performers were vertical 120×240 banners with Flash and a full (468×60) banner with Flash, which both got rates of 0.05%.

As with television ads, it’s difficult to determine the effectiveness of digital advertising by only looking at click-through. It is important that we recognize that banner-ads are not created inside a vacuum, but are rather one small part of a larger complex advertising strategy. Needless to say, if studies continue to come out showing any aspect of this strategy to be failing it could lead to major implications for Google.

At lunch on Sunday, I discussed these two items with two people immersed in Web advertising. Three observations stuck in my mind:

First, if there is a softening in click through or online ad revenue, Google will have little choice but find ways to pump up its revenue.

Second, the notion of social media fatigue seems germane. People may be tired of online ads. The result is to shift to a more low profile “pay to play” model. Overt ads may be on the down side after a long run up.

Third, the urgency for organizations like Google and Flipbook to find a way to inject rich media is an indication that the ad revenues flowing to television advertisers are the next Klondike.

I am not sure what to think, but this notion that online ad revenue may need some xoskeletal supports is fascinating. There are significant implications for objective search results as well.

Jasmine Ashton, August 31, 2011

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