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Survey: Banners losing effectiveness

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While banner advertising is among the most popular methods of promoting a Web site, its standing may suffer because of poor effectiveness ratings by users, according to research released last month.

Online research conducted by WebCMO, a Web site dedicated to Web marketing research, in July found that 45.5% of respondents planned to promote their Web sites "very often" through search engine submission in the future, 38.1% planned to use offline promotion very often, 34.6% solicited e-mail and 30.9% planned to use banner advertising very often.

While 21% of respondents were very satisfied with the price of banner advertising, 16.5% were very dissatisfied. And 17.4% were very dissatisfied with the traffic generated by banner advertising, while 10.4% were very satisfied.

Even greater dissatisfaction was found when respondents were asked about sales generation. Only 5.8% reported being very satisfied, while 28% were very dissatisfied.

Fly, banners, fly

Despite these high levels of dissatisfaction, 43.2% of respondents said they were very likely to use banner advertising in the future.

Jim Nail, a senior analyst for Forrester Research, Cambridge, Mass., says he isn't surprised by the banner advertising findings.

"Banner ads were the first thing to happen on the Web for marketers," Mr. Nail says, so its usage continues to be high.

He said he thinks some of the dissatisfaction stems from the creative limitations inherent in the segment.

Also, the "Web is not yet a mass medium, so its reach is not as broad," which can spur dissatisfaction. Still, he says, the Web reaches a valuable 25% to 30% of the market.

Tim Lee, director of research for WebCMO, says the study found that the three most effective methods of generating sales and traffic to a Web site are search engine submission, solicited e-mail advertising and offline promotion, but the three most frequently used promotional methods are search engine submission, offline promotion and banner advertising.

Search engines were considered very effective at generating sales by 20.3% of respondents, offline promotion by 18% and solicited e-mail by 16.5%.

"Solicited e-mail is often confused with spam," Mr. Nail says, so marketers may avoid using it even though it is effective.

"I expect to see more and more cross-pollination of offline to online marketing," he says.

Mr. Nail said he thinks the market will see increased use of print and TV advertising as a portal to a company's Web site. In fact, he thinks Web site traffic may become a new way to measure the effectiveness of offline promotion.

"It seems that the future of online banner advertising depends on its click-through rate instead of how to calculate the price," he says. "The dynamics of the Web business promotion market is not only about segment targeting, but also about segment competing. If the online advertising community is unable to increase the effectiveness of online banners, the online banner advertising market will become the smaller part of the ever-growing bigger pie."

Traffic before price

Mr. Lee says the report's online banner ad satisfaction analysis shows price is not a key driver for online banner advertising satisfaction. He says generating traffic and sales contributes more than 70% to online banner advertising satisfaction among five attributes: Price, generating traffic, generating sales, relationship with ad agency and statistics reports.

Mr. Lee says search engine submission will become the center of the battlefield for Web marketers.

More information on the results of the report can be found at http://www.webcmo.com.

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