Why Is Everyone Still Dumping Money Into Banner Ads?

Let's face it: banner ads have been tanking for a long time. The term "banner ad blindness" was first coined in 1998 by Jan Panero Benway and David M. Lane.

In July of '07,Dave Morgan blogged about a study that he conducted with AOL on ad clicking behavior.

Ninety-nine percent of Web users do not click on ads on a monthly basis. Of the 1% that do, most only click once a month. Less than two tenths of one percent click more often. That tiny percentage makes up the vast majority of banner ad clicks.

Who are these “heavy clickers”? They are predominantly female, indexing at a rate almost double the male population. They are older. They are predominantly Midwesterners, with some concentrations in Mid-Atlantic States and in New England. What kinds of content do they like to view when they are on the Web? Not surprisingly, they look at sweepstakes far more than any other kind of content. Yes, these are the same people that tend to open direct mail and love to talk to telemarketers.

Eye tracking and usability research has indicated that not only are banner ads not clicked, they're not even noticed, a term dubbed "banner ad blindness," so they apparently don't even count for much in the branding department.

If a marketer determines that advertising is an integral part of their online marketing plan, and often they do, there are several formats and technologies that are capable of outperforming traditional display ads - by a lot - why aren’t more people using them? Video ads for instance. Video ads are seeing anywhere from 10 - 20X CTRs over traditional display ads. They are also demonstrating recall of up to 4X over television ads. Why? Well, look at the graphic above, when a video ad plays the viewers attention is already focused on the content that was previously occupying that space. There are also rich-media banner ads that in addition to rich media content have the feature sets that make it possible for users to share and embed content directly from the ad.

So here's my question: why is everyone still dumping money into banner ads? I have some theories:

Old-school agencies do not understand how the web has evolved and cling to what they know
I remember when I was designing websites back pre-bubble 1.0. I started my career in the digital space, beginning with programming, leading into design and multimedia. I remember interfacing with agency designers and creative directors that all moved from print work to the internet. As a result, they were creating incredibly static, print-like websites. They were so used to their way of doing things that that they couldn’t fathom the possibilities that were now possible with the web, they weren’t excited about it.

I think the same can be said of display ads and ad placement. They aren’t taking advantage of the environment they exist in.

Marketing managers are afraid to take risks
Banner ads are accepted and safe (even though they clearly aren’t effective - WTF?) But no one is going to get fired for running a banner ad campaign. I will posit this: At this point, it is a much bigger risk to continue along the same path than it is to try something new

There is a shortage of people in the marketing world who truly understand the social web
I am willing to bet, and I’d love to know if anyone has a study, that there is a direct correlation between the decline in display ad impact and the evolution of the social web. People don’t need ads any more, they have each other. So how can brands remain relevant in this environment? I believe that there needs to be a quantum shift in thinking in terms of online marketing. Marketing and advertising are not the same thing. Advertising is a company-out model, the social web is built on a consumer-in model. They just don’t mix. Marketing needs to include everything from product development to customer service to listening to and participating in conversations. In the evolution of the web, there is a new tool set. First there was browse, then there was search, now it’s all about “do.” For a brand, that means placing your content, your people, your insights and your products at the crux of those interactions. Marketing on the social web also means giving people (customers, fans, advocates and employees) the tools that make it easy for them to become a voice for your brand online.

Clients are used to metrics and continue to cling to them (even if they totally blow)
I can’t tell you how many times I’ve been in meetings and the subject of metrics comes up. There are currently several companies who offer metrics for the social web, we are working with a couple of them. They provide a decent overall picture, but still fall short in that they aren’t able to actually get into the networks themselves and pick up on conversations, which is usually where the majority of the conversations are happening. But at least I have some nice charts and graphs to show my clients, all with numbers attached and we can measure the impact of certain activities. Admittedly, as an industry we need to do better in this area, and I’m sure technology will improve. But I also think there needs to be a shift in expectations. Marketers are so used to receiving these types of metrics from the web, being able to calculate to the penny CTR, CPA, ROI, etc. But how do you measure CTR on a billboard? Or a magazine ad? Or a press release? You can’t. And yet they are all still executed by marketers on a regular basis because it’s accepted that these are effective means of reaching people.

But still, I really don’t get it.