If banner ads were battle flags, right now they'd be emblazoned with the war cry, "Don't click on me!" Internet banners are the Sad Sacks of advertising. Their performance is so poor it would lead any honorable direct marketer to commit hara-kiri. The failure of the banner is so pronounced that many mainstream marketers -- who, after all, have other media on which to house their pitches, including such tired senior citizens as TV and magazines -- are defenestrating the Internet from their plans.
The sad part is, it didn't have to be this way. There was nothing in the genes of the Internet that required it to spawn banners. And no one put a gun to the heads of online marketers and forced them to sign banner-insertion orders. Instead, banners proliferated because they were pushed on a naive industry by a trade association looking for simplicity and growth. While its motives were honorable, there's a lesson here for those who would seek to direct the evolution of a revolution: Don't lead, don't follow, just get out of the way.
Barely there click-throughs
How bad are banners? Banner clickthrough rates now stand at 0.25% of banners viewed, according to the Internet Advertising Bureau, down from 8% five years ago. Research by my colleagues at Booz-Allen & Hamilton, utilizing detailed clickstream data from NetRatings, the Internet data company, indicates even worse performance. On major portal sites -- the most popular and trafficked spots on the World Wide Web -- banner clickthroughs are now 0.1% to 0.2%.
To put flesh on the math, consider that direct mailers (depending on the category and other considerations) would normally expect at least a 2% to 3% return on a mailing -- that is, two or three people out of 100 actually purchasing a proffered product. With banners, somewhere between one and three people per thousand opt to click -- even though the click is only a request for information and won't cost them a penny. As a disaster, banners are the Hindenburg, the Great Chicago Fire and the Battle of the Somme, all rolled into a tidy package.
In the case of banners, the IAB played the same role that hydrogen gas, Mrs. O'Leary's cow and head-on infantry assaults played in those earlier catastrophes. Back in 1996, the IAB adopted standard sizes for Internet ads. The bureau reasoned that by standardizing the size of ads on the new medium, it could forestall the chaos of multiple shapes and usages and, through the consequent ease of placement, drive increased deployment of Internet advertising and higher revenues for both Internet media and Internet agencies.
There was nothing dastardly in the bureau's intent. I remember meeting and speaking with IAB founder (and still chairman) Rich LeFurgy at the time, and was impressed by his passion to establish the Internet as a medium and to develop a form of marketing communication that would allow advertisers for the first time to determine real ROI.
In hindsight, though, that mid-'90s push to standardize banners seems utterly misplaced, for it was a supply-side effort that neglected the needs of the demand side. Even if unarticulated, the IAB's aim was to make life easier for its member agencies and media companies. It didn't focus on the random surfers, the busy business users, the stay-at-home dads, the working moms, the Napstering college students -- in other words, on the real, human consumers who, in a media-saturated culture, couldn't care less about standardized ad sizes, but would really fall for original, boffo creativity. Why, I wonder, did any advertiser or site accept the bureau's constraints, rather than chart its own path toward the light of true consumer appeal?
Misperceiving the consumer
It's an ongoing problem with advertising: misperceiving the identity of the real customer, and fixating on form rather than function. I concede that the former challenge is difficult. To appease your clients is not only natural but often necessary to the survival of the business, especially in a new category. But the latter shouldn't be a problem at all. Yet it is. Consider the incredibly narrow interpretations the industry applies to the word "creativity" -- e.g., "entertaining TV spot," "funny headline" -- and you'll understand how constrained advertising is.
If experience tells us that success comes from thinking outside of the box, why then do we continue to build the boxes -- or banners -- that confine us? As Internet advertisers retrench from the banner debacle, that's the question they should be asking.
Copyright March 2001, Crain Communications Inc.