So much has been written about advertising lately. iOS 9 added content blockers and the world’s gone mad. There’s one part of the discussion that is completely void, however: do online display ads even work?
For newcomers, there are some terms we need to define upfront. First, “display ads” are just what they sound like — images that appear on a website and are an ad for another product or service. Sometimes these are called “tiles” or “banners”, but they’re unmistakably ads.
Second, advertisers tend to get paid in one of two ways: impressions or clicks. If you have an ad and you pay for 100 impressions, you pay for it to appear in front of someone a set rate. If the cost is $1 per impression (which is actually very high, but for the sake of easy math, stick with me), you’d pay $1 every time your ad was displayed in front of someone. This is a lot like paying for a billboard, but on a webpage and not a highway.
The other method is click-through. This is where if you have an ad and you pay $100 for it, your budget is exhausted every time someone clicks the ad. So your ad may display to someone 200 times, but 100 people might click it at a cost of $1 per click to you (again, that’s very high. Often click rates can be as low as a nickel per click, depending on where, how, and who you’re advertising to). This is the more popular way of displaying ads and it’s how Facebook and Google AdWords operate.
With iOS 9 Apple allows ad blockers to populate their store. Mac and PC users have had access to these sorts of things for years, like through the popular AdBlock plugin for Safari, Chrome, Firefox, etc.
Ad Blockers taking a bite of revenue
Ad Blockers really take a bite out of revenue for both impression and click-rate based ads. If your ad isn’t seen, it can’t be interacted with or charged to your budget.
But here’s the thing: have you ever clicked on a banner ad? Have you ever clicked on the “sponsored results” ad on a Google search results page? Have you ever looked at an ad and thought, “Oh, I should check that out. That looks interesting.”
If you’re like me, you have not. And you’re not alone.
Click rates are under 1% globally. That’s within the margin of error. And the rate of fraud among these ads ranges to 2% to nearly 20%, depending on who you ask.
It’s reasonable to assume that ad agencies making a living off this stuff have a reason to goose the numbers.
I’ve never had any success with impression or click rate advertising. I’ve never had any success with other clients doing online advertising. I’ve never heard of anyone else having huge successes. To most, a “a huge success” is a click rate of .9%. In any other world a success rate that low would be deemed a dismal, embarrassing, failure.
We also have to ask ourselves, do these ads make money for the advertisers? They may make money for the content writers, video editors, and managers hosting campaigns. But they’re probably not making money for the people selling the original product.
So what should advertisers be doing?
Advertisers, and that may include you if you’ve ever thought about putting together a Facebook or AdWords ad, must recognize the consumer’s view. You have to recognize that in most cases your product or service is not that valuable to most people most of the time. Companies like McDonald’s or Coca Cola are going to get the most use out of these ads because they rely on what I call “existence advertising”, or, “reminding you that we exist.” Because for them it’s important to keep the golden arches in front of your face.
This does not go well for a company just starting, or an organization trying to solicit donations.
Advertisers have to adapt and be better. For too long the ads have sucked. I haven’t even talked about why Apple introduced these ad blockers, and it’s largely because Apple’s a company that wants to be seen as a protector of your privacy. Ad networks now, including Facebook and Twitter which are probably the biggest offenders, track your every move. Even when you ask them not to. It’s why when you visit Amazon and do a search for lamps you immediately see ads for lamps in your Facebook feed. Or why a Google search for new tennis racquets immediately puts ads for tennis supplies on that blog you like reading.
Again, recognizing the consumer’s view that tracking is across the line creepy, a little scary, and of dubious value (once I buy the lamp, why do you keep showing me ads for lamps? I just bought one, and I don’t need another.).
Advertisers have to push themselves harder. When your ads are lame, boring, ineffective, inefficient, and generally don’t concern me, you have failed. When they fail to solicit a reaction, advertisers have failed. When ads aren’t personable, they have failed.
Ad Blockers are in no small way consumers pushing back against the onslaught of crap ads that look bad, are ineffective, and detract from the original goal the person had of getting to some information.
The new ad manifesto
That’s why advertisers should do these 5 things:
- Limit yourself to small or standardized ad sizes that fit in specific locations if you must use a display ad.
- Stop using ads that pop-over a screen, hijack scrolling, or render devices unusable, particularly mobile phones and tablets.
- Recognize almost no one cares about your whatever. Everything you’ve heard on podcasts and conferences about “sales tactics” and how “you’re helping people when you tell them about your product or service” is ignorant of reality.
- Stop using trackers for logged-in services. You can go as far as using a cookie file, but that’s it.
- Recognize that in a capitalist, democratic society, people vote with their actions. If businesses, blogs, and other publications go under because their ad revenues were already so tight to begin with, then it was never meant to be. It’s not good enough.