Do people not see Internet adverts?

As marketing dollars continue to pour online compared to more traditional areas, like TV, radio and billboards, new research indicates that most people don’t see these online adverts. The phenomena known as ‘banner blindness’, ties in with the concept that savvy web users have effectively trained themselves to blank out these online ads. This is particularly prevalent amongst young web users, with eye tracking tests indicating that users have learned not to look at the right hand column of a web site, knowing that is the prime zone for adverts to appear.

Traditional advertising budgets, such as for TV, are increasingly finding their way online. However, online advertising is yet to live up to its rich premise

We’re approaching something of a watershed moment in online publishing. Since the Internet really ramped up and hit critical mass in the late 1990’s and early 2000’s, we have been used to accessing valuable web resources free of charge. From leading newspapers through to subscription magazines – both services that we would historically have to pay for – the Internet has been defined by being open and free.

The reason it is free is because of these adverts. They started off in 1994 with the banner advert. Back then it was a modest sized 468×60 pixel unit but over the intervening two decades a vast array of new formats have been added. The square 300*250 MPU (see bottom of this article for an example) unit quickly became a firm favourite, and new banner sizes and specs seemed to launch daily, with the 728×90 leader board becoming the most popular digital advert. (See top of this article for an example). New, sexier formats came along too, all looking for better performance and to deliver ‘higher impact’. Video ads, skyscrapers, site skins, text ads and page take overs all grew in popularity, leaving a rich ecosystem of adverts – adverts that are failing to deliver impact because people don’t see them.

Some of the biggest online publishers derive the majority, if not all of, their revenues out of online advertising.

So now we’re reaching a watershed moment in publishing. Advertisers – the ones paying for the content you read online – are not seeing the returns they would like. Typically, they buy online adverts on a ‘Cost Per Mille’ (CPM for short) basis. One thousand impressions of a web page equates to one CPM unit. These units range in price markedly, from £0.01 on little known publications remnant inventory, right the way through to £100+ for a niche but valuable captive audience. Certain sectors gather higher rates, such as technology, business and automotive, whilst other areas like entertainment can typically sell for one third of the premium sector prices.

CPM offers a safe and predictable model for web publishers, but the prices are now getting squeezed due to poor ad performance. Historically, adverts were judged on their click through rate. Calculated as a percentage, the CTR is a simple to compute and easy to apply advertising metric. For advertisers, it provides reassurance that people are seeing and interacting with their ad. If the advertiser is looking for a direct customer response – think trying to make you click through and buy something – then this is the golden metric combined with conversation rates. The problem is, CTRs are declining, and declining really fast.

Advertising CTRs have followed a similar path to Google SERP clicks

In 1994, the worlds first banner advert had a 78 percent CTR, meaning a staggering 78 percent of all people who saw the web page clicked on the advert. By 2011, the citron Facebook adverts was a meager 0.05 percent. In less than 20 years, the Internets main ad format was performing 1,500x worse. Whilst Facebook is artificially low due to its content type, the Internet average advert CTR has fallen markedly. The average advert CTR on BurnTech.TV is around 2 percent, to keep it in context.

Its increasingly recognised that CTR is a poor metric, as research indicates a negative correlation between a company’s customer and those who click their ads. Naturally, online ads can and do influence people without them taking action and clicking, let alone buying, right away. Other metrics like viewability (as many as 30 percent of online ads are thought to never get viewed due to their poor on page positioning) are increasingly being used.

All of this is threatening the Internet as we have come to know it. More and more publications are resorting to pay walls, a concept that goes against the whole Internet ‘open and connected’ mantra. So the increasingly bloated online advertising lunarscape, consisting of hundreds or advertising technology company’s needs to find the answer. Otherwise, the free Internet could end up becoming a glorious memory of the webs golden era.

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