“Data Driven Thinking” is written by members of the media community and contains fresh ideas on the digital revolution in media.
Today’s column is written by Dave Zinman, CEO of Infolinks.
The economics of online advertising are at best confusing and at worst completely backwards. We've got a zillion systems to target ads and auction them to the highest bidder. Yet more often than not, the advertiser willing to pay $10 CPM gets the same amount of real estate as an advertiser willing to pay $1 CPM!
Why do we create the ad space on the page regardless of how much it is worth to an advertiser and how relevant the ad is to the consumer? There have got to be smarter ways to operate.
From studies performed when I was at Yahoo, we learned that users have a finite and limited budget for viewing advertising, regardless of how many ads are placed on a page. If a site with 200 million page views and 20 million visitors a month has a leaderboard, a skyscraper, an LREC, and an AdSense footer on every page, that's four ads per page. This equals 800 million ads per month, or 40 ads per month per user for that site alone. If 90% of the revenue comes from the best 25% of the ads being served, why not serve only 10 ads per month to users? While you’re at it, why not increase the effectiveness of those 10 and simultaneously improve the consumer experience on your site by eliminating the ads that aren't generating compelling revenues and high relevance?
It’s no wonder, looking at these stats, that banner blindness is such a glaring issue. Talk about losing sight of the forest for the trees: We’re so busy looking after our bottom line, we’re not paying attention to the user experience. We hit our visitors over the heads with ads like sledgehammers, then wonder why our ads aren’t “performing.” It’s absurd. Clearly, we’re doing it wrong.
If advertisers and publishers want to see profits, we all need to put the user first. The ads we create have to consider what users want to see, as well as when and where they want to see it. Ads must be relevant enough to address user intent the moment they are viewed – that is, they have to fulfill the user’s current need or desire. But it’s difficult (if not impossible) to do this 10 times on a single page. At this point, it’s also unreasonable to expect results from a banner running in standard IAB placements. We’ve effectively killed the banner ad over the last decade – consumers don’t even notice them anymore. We have to rethink the ads themselves, as well as how they’re served, and develop new and engaging units that will appeal to banner-blind audiences.
While we’re at it, we also need to rethink the way we sell advertising. Publishers struggling to make their numbers will sell every pixel on the page to earn revenue, but ultimately, this benefits no one. The end result is that one advertiser pays top dollar to have its top ad go largely unnoticed, and the publisher accepts far less payment for a significant amount of “remnant” inventory, filling the unsold slots with lower-quality ads that (at best) annoy users and pull focus from the premium advertiser. So I ask again: Wouldn’t a publisher be far better off serving fewer ads, and taking top dollar for one or two premium placements? With highly relevant ads that aren’t forced to compete against several other ads on the page, odds of interaction and possible conversion are tremendously improved. And when ads perform better, publishers, advertisers and consumers win.
A final thought: What if those few, relevant ads came in more engaging formats? We can certainly begin to combat banner blindness, driving more success for advertisers and publishers alike, by simply decreasing clutter and increasing relevance. But what if we also introduced a third lever: Placement innovation? If we can consider the consumer and how exactly they want to receive our messages, rather than how we make our ads “STAND OUT” and BE SEEN – then, maybe we can get creative and smart enough to end banner blindness once and for all.