BEYOND THE BANNER: Is the banner ad about to be killed off? Mark Tungate looks into the future of online advertising

This summer, two men who once served in the Israeli army sat in a Hammersmith pub and revealed their plans for a revolution. On their laptop, and in the slim plastic folder they pushed obligingly across the table, were the details of a plot they insisted would overturn an entire system.

This summer, two men who once served in the Israeli army sat in a

Hammersmith pub and revealed their plans for a revolution. On their

laptop, and in the slim plastic folder they pushed obligingly across the

table, were the details of a plot they insisted would overturn an entire


The two men were the founders of an Israel-based company called


Their revolutionary idea was a system called iNotes, which they believed

would kill off the banner ad. Before forming their company, the men had

served in the Israeli army’s technology unit. Only in the weird world of

the internet could two former soldiers claim to have invented a new

advertising technique.

Using messages that traverse users’ screens at regular intervals, rather

than waiting to be clicked on like banners, iNotes is highly intrusive

and, says iWeb CEO Kobi Samboursky, highly effective.

Falling clickthrough

Such initiatives play on fears that internet users are beginning to

ignore banners. According to some sources, clickthrough rates are

falling and as a result so is the amount of cash advertisers are

spending on banners.

But online sales professionals assert that, while new ideas are welcome,

they are unlikely to kill off the banner in the near future. A recent

study by Price-waterhouseCoopers found that banners still account for 53

per cent of adspend on the net, with sponsorship taking 30 per cent and

more experimental methods sweeping up the remainder.

’Banners are certainly not dead,’ states Tanya Pein, former managing

director of online sales house 24/7 Media UK. ’The market is growing at

a dramatic pace and they’re becoming more cost-effective and more


They are as popular with advertisers who have been online for years as

they are with those who are going on to the web for the first time this


Peter Wilson, TSMSi’s sales manager, confirms: ’There’s plenty of life

in the banner yet. I’d be pretty concerned if a client came to me and

said ’I want to be online, but I don’t want to use banners at all’. If

you place them on the right sites and target the right users, they can

still be enormously effective.’

But he agrees that banners themselves are now more alluring. ’Old-style

banners were flat and unanimated. If you still see examples like that,

it’s usually a combination of an agency which doesn’t understand the

medium, and a knee-jerk reaction from a client thinking ’I’d better go

online, so I’ll just slap up a banner’.’

Ian Maude, head of advertising at AOL UK, suggests sales people remain

keen on banners because they are convenient. ’They are universal,

they’re portable, they’re standardised and they are easy to measure. And

if you have the right product message, the right creative and the right

placement, they are also extremely effective. Thomas Cook (an AOL

client) gets a 20 per cent clickthrough rate on its banners.’

Clients that are new to online advertising are particularly likely to

opt for banners over more complex solutions. Anna Barez, sales director

Europe at search engine Lycos, comments: ’In many cases, agencies are

still trying to educate clients about the internet. First they have to

convince them to use the net in the first place. Then they have to

explain banners. If they then start suggesting there’s something even

newer than banners, they may have a problem on their hands.’

Having said that, net-savvy advertisers are undoubtedly looking for more

sophisticated means of reaching users.

Lycos offers a number of what might be termed ’next generation’


These include video banners, which incorporate digital versions of

advertisers’ TV spots. When users click on the banner, they see a replay

of the advertiser’s TV campaign. According to Barez, clients such as

British Gas and Peugeot attracted 50 per cent more users to their

banners when they employed this device.

Video, audio and animation online are known as rich media, and there are

a number of software companies providing this kind of technology to

advertisers. High-profile names include Macro-media, Unicast and


Brian White, media services director at Real Media, another online sales

house, devotes almost all his time to exploring online advertising

techniques that go beyond the banner. ’In September, 40 per cent of the

campaigns we ran used rich media as opposed to traditional banner

advertising,’ he says.

Rival sales house DoubleClick has seen a similar escalation of


Sponsorship director Stella Fairbairn says: ’Banners are now so

ubiquitous that people are attracted to the thrill of the new. There’s

no doubt that experiments can pay off. We have seen response rates go up

by as much as 300 per cent.’

Typical examples include interstitials - advertisements that appear

unexpectedly on content pages - although these have been known to annoy

users because they take too long to load and slow down the surfing

process. More recently, Unicast unveiled the ’superstitial’, which loads

separately from web pages and only appears when it is ready to be


Unicast is convinced superstitials have the brand-building potential of

TV commercials. Film companies have successfully used them to build

awareness of movies like The Mummy and Austin Powers: The Spy Who

Shagged Me.

’It’s possible to achieve an astronomical amount of brand recognition

using rich media,’ says White. ’Movies are one of the obvious

applications because the creative is already available. For other

products, you have to come up with new material, just as you do with TV

campaigns. I can see a time when there will be advertising agencies

specifically devoted to creating rich-media online campaigns.’

Suspiciously rich

Some website publishers are suspicious of rich-media ads because, unlike

traditional banners, they often take up a full page and mask site


But forward-looking marketers and creative agencies are extremely

positive about them.

’It’s easy to see why,’ comments Maude. ’After all, you have a lot more

space to be creative. You can’t have a banner ad directed by Ridley


From an effectiveness point of view, Maude says it is impossible to

generalise about the merits of rich-media techniques over banners.

’There’s no way you can say, ’banners are great’ or ’banners are shit’.

You have to look at each client and its objectives. But it’s important

that some kind of experimentation goes on, because that’s how the medium

will develop.’

History (if the internet can claim such a thing) suggests that it will

develop rapidly. When clients first heard about the web, they rushed to

set up their own sites. Most have since dismantled them, realising that

a static web page promoting a soft drink is likely to bore users.

Marketers now prefer to advertise on existing sites.

Banner ads themselves have evolved. At first they were different sizes,

so clients found it hard to advertise on more than one site. Realising

they were missing out on advertising dollars, online publishers quickly

standardised them.

It’s likely that the future of online advertising lies beyond the

internet as we know it. 24/7 and DoubleClick are already exploring the

potential of Wireless Application Protocol (WAP), which allows users to

access web content through mobile phones, palmtops and pagers.

Advertisers will also be able to send messages.

E-mail commercials are also growing in popularity with clients, despite

the danger that they could irritate users. A possible way round this has

been devised by US company Megachain, which awards commission to users

who agree to recommend goods and services to their friends and


The theory is that recipients are more likely to click on an ad

forwarded by a pal.

John Haswell, an investment analyst at Greenchip Investments, which will

run Megachain when it launches here in the new year, is convinced

banners are on their way out. ’There’s a lot of evidence to suggest the

sheer volume of banner advertising is annoying net users. Banners are

still not very targeted and are often seen as irrelevant. Banner

advertising is dead on its feet.’

The truth is that the banner will be with us for some time yet, but only

as one of many advertising options. One thing is for sure - the internet

is rapidly becoming as cluttered as every other medium, and advertisers

will have to work harder to stand out from the crowd.



The standard advertising format on the web - a strip at the top or in

the margin of a web page enabling users to click through to the

advertiser’s site. Hence ’clickthrough rate’, used to measure

effectiveness. Page impressions, referring to the number of users who

merely see the banner, are also becoming a popular measure - some say

this is because clickthrough rates have slumped.

Key word advertising

When a user types certain words, the advertiser’s banner appears on the

page. Some search engines will sell the names of competing companies -

eg. the word ’Barclays’ to Lloyds.

E-mail advertising

The electronic equivalent of direct marketing. Increasingly cited as the

most likely contender for stealing the banner’s crown. Opt-in referral

e-mail - giving users commission for sending e-mail ads to their friends

and relatives - has been developed as a way of encouraging recipients to

read messages.

Rich media

Combines audio, video and graphics to create near-TV quality ads. Can be

used within banners. The downside is it takes up a lot of bandwidth (the

capacity for moving images and data) so ads take longer to download.


Intrusive, often full-page ads that appear unexpectedly on web pages.

Unpopular with users because of the lengthy downloading process - and

similarly with media owners because they cover site content.


Similar to interstitials, but they do not become visible to the user

until they have finished downloading, so do not interrupt surfing. Some

web experts believe they could become the next industry standard.


Wireless Application Protocol. Allows users of mobile phones, palm-tops

and pagers to check web content while on the move - and also receive

messages from advertisers.


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