Close-up: Does online display advertising work?

Banner advertising spend may be up, but are consumers paying attention, Caroline Lovell asks.

Last week, YouGov released its "2009 Online Advertising Trends Report", which found that 57 per cent of consumers rarely or never pay attention to advertising on major websites, with even higher rates of banner blindness on social networking sites.

While figures from the Internet Advertising Bureau show that £277.6 million was spent on "banner/embedded" ads during the first half of 2008, a 16.3 per cent growth in spend since 2006, they also show that it is lagging way behind paid-for search, which increased by 28.7 per cent in the same time period to £981 million.

Meanwhile, the Advertising Association is forecasting that online display advertising's share of adspend in Britain is set to fall over the next ten years.

One of the main reasons for a decline is that judging the effectiveness of banners is difficult. There are a host of measures to test effectiveness, from looking at the overall impact on the brand to on- and offline metrics, but many argue that none of them are particularly effective or worthwhile.

Even the Joint Industry Committee for Internet Measurement Systems, set up in conjunction with the IAB to create an industry-wide online audience measurement system, collapsed just months after its inception because of problems securing funding from stakeholders. It has now been relaunched as the UK Online Measurement Company.

However, while many believe that isolating the effectiveness of display advertising is "pointless", some do think that when used as part of a wider campaign, it can produce positive results.

Mark Creighton, the managing director of i-level, says: "We can prove that it drives more sales at a more efficient level than you would get if you weren't running it."

A further study by the IAB and Thinkbox showed that using TV and online (specifically banner ads) together delivers a 54 per cent increase in brand perception and increases the likelihood of purchase.

However, measurement aside, most agree that the main problem with banner ads is that the overall standard of creative is poor and needs to be more personalised and interactive, with greater use of rich media, to provide more content that is engaging, targeted and relevant to specific consumers.

The YouGov report also found that 56 per cent of ABC1 adults were more likely to visit specialist niche sites specific to their interests, rather than larger portal sites. And out of those people, 73 per cent said they paid attention to the advertising, supporting the view that relevancy is key to success online.

Mark Cridge, the chief executive of glue London, says: "Most online advertising is either irrelevant or poor quality or both. That is what creates the wallpaper effect, and makes it easy to ignore. Its relevancy is critical."

Richard Huntington, the director of strategy at Saatchi & Saatchi, adds: "I've never seen a digital ad that has made me cry. The industry is obsessed by silly interactivity and novelty, as opposed to emotional engagement."

For banner advertising to become an integral part of the marketing mix, it needs to cease being an annoyance and an interruption by providing content that is worthwhile, engaging and interesting. However, without a working measurement system, spend is bound to decrease, leaving less chance for agencies to create truly groundbreaking content.

ASSOCIATION CHIEF - Guy Phillipson, chief executive, Internet Advertising Bureau

"Essentially, there is an argument that consumers don't click on banners in the same way as they used to, unlike how they click on search results now. But the fact is that display advertising increases visits to websites through search, as the banner has motivated them to put a term in search.

"The rise of behavioural targeting will improve the performance of online advertising. It's all about having a better idea of what your target audience wants.

"I think agencies could do more to make use of the space online. It is very easy to turn a banner into an expandable banner and insert rich media and video to make it more fun and engaging."

CREATIVE - Daniel Bonner, European chief creative officer, AKQA

"Brands who are gunning for front-of-mind-ness are not fulfilling their potential or the potential of the media.

"There was a time when consumers would ask of advertising 'What is it telling me?', whereas I believe that online and digital-based media has moved the game on and the questions now are 'What can I do?' or 'What does it do for me?'

"In a world where advertising can now facilitate so much more than one-way broadcast, where you can download, register, play, personalise, share and take part all within the 'ad', why would the audience settle for anything less?"

AGENCY CHIEF - Mark Creighton, managing director, i-level

"We have done a lot of work which demonstrates that display advertising drives an incremental increase in sales. To grow sales volume, only so many sales will be achieved in search. Display can scale up that volume. The comparison with offline media is very compelling.

"I think it is more about the way you target consumers online. You need to understand the way consumers are behaving. The message has to be relevant to the consumer in the right context and in the right content.

"The creative needs to be more personalised than in other media, which can throw out a big net with the same message."

PLANNER - Richard Huntington, director of strategy, Saatchi & Saatchi

"This is really about whether online digital advertising is any good rather than it not working; it seems a bizarre statement to say it doesn't work. Our real problem is that it's not very good.

"We're not applying the same creative standards to our online advertising as to our offline advertising and until we start doing that, we can't have a sensible debate about whether it works.

"Digital favours physical interaction far more than emotional interaction. Our primary job is grabbing people's attention while they are doing something else. I'm not surprised that consumers are not interested, as the standard of work is not high enough."

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1 Job description: Digital marketing executive

Digital marketing executives oversee the online marketing strategy for their organisation. They plan and execute digital (including email) marketing campaigns and design, maintain and supply content for the organisation's website(s).