How Effective Are Your Display Ads?

Research from comScore and AdSafe Media has called the efficacy of traditional display advertising into question. According to their findings, putting too much value on impressions alone could be costing advertisers billions of dollars. comScore reached this conclusion after analyzing the display ad campaigns of 12 major brand advertisers. What they found was that an average of just 69% of ads were “in-view”, which by their definition is when a user views 50% of an ad’s pixels for at least 1 second.

Not surprisingly, the larger a website is, the higher the percentage of in-view display ads. The top 50 sites for each brand’s industry vertical had the highest in-view percentage at 77%, but then declined steadily when broadened to include the top 100, 200, and so on.

Display ad size also seems to affect its in-view frequency. Leaderboard ad units, the 728x90 pixel display ads that appear across the top of a webpage, were in-view 74% of the time, the largest percentage of any position. Medium rectangles were in-view 69% of the time, with so-called “wide skyscrapers”, those ads that span vertically down the page, ranking last at 66%. This data points to one of our previous blog posts regarding the importance of above-the-scroll web design and advertising. It also shows that any ad that you have to scroll down to view entirely, such as a wide skyscraper, is going to lose the viewers interest. And conversely, a large vivid ad at the very top of a webpage is going to be the premium spot.

Most importantly, comScore and AdSafe Media’s research reveals that, regardless of ad size or placement, a sizable portion of display ads are not even meeting the lowest standard of branding impact. When looking at pure impressions, the percentages would assuredly go up; however, it does not mean that the ads are engaging the viewer in any real sense.

We are already seeing a trend towards finding alternatives to display ads, and also novel attempts to find clearer standards for more effectively measuring their ROI. For example, the respected online advertising management provider Marin Software recently found that Facebook ad spending is shifting from marketplace ads, those targeted display ads that show up in a user’s right-hand column (as determined by “likes” and demographics), toward Sponsored Stories. These are posts that brands actually pay for to promote greater visibility and which users can interact with, thereby becoming measurable data culled from each user’s social graph.

In less than a year, from April 2011 to March 2012, Facebook ad budgets allocated to social ads grew from just 5% to 23%, with Marin expecting this trend to reach 50% soon. Another indicator of this switch is that cost per click for social ads increased 86% and display ads decreased 15% over the same period. Is it a more effective form of advertising? According to the click-through data, Marin determined consumer engagement with Facebook ads had increased 50%.

Of course, Facebook is only one area of the online landscape. None of this is to say advertisers should, or will, reject display advertising. When properly deployed, it continues to thrive in the search, classifieds, and mobile categories. Recently, it’s become trendy to predict the eventual demise of display advertising, but much more likely in the months and years to come is a more integrated relationship between display and social advertising, and the adoption of more accurate measurements for the effectiveness of traditional display ads other than simple impressions.

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