Display Advertising Doesn’t Work


Most internet ad professionals quickly learn to get their heads around the key metrics that drive their industry and get them so much kudos at dinner parties and the like. I am of course talking about cost per mille (CPM), cost per click (CPC), click through rate (CTR), and percentage conversions rates.

As the industry has matured, we are able to benchmark performance against the increasing amount of statistics that are now available in the display advertising industry.

Google, in their online report portal, show that the best performing click through rate across all ad sizes 0.26% (that is one click for every 385 people who view the ad). For banner sizes that generally appear in mobile campaigns the click through rates are much lower. Google quotes that 300×250 banners have a 0.1% CTR and  468×60 banners have a 0.05% CTR (1 click for every 2,000 views). Admob also a Google company is on the record as clarifying their click through rate as 0.5 -1% average.

Now what gets me all fired up is that these appalling click through rates are accepted as industry standard. Can you manage organizing a party and only 1 of your 385 guest turned up. You wouldn’t be telling yourself that the invite process produced a great result. Yet, we accept these results for traditional display advertising. It is akin to inviting people to your party via smoke signals when newer and better methods are already available.

Surely we should be doing something smarter?

I’m pleased to note that things are moving and mindsets are moving as well.

It’s common sense. What’s the point of an advertising campaign that broadcasts to people who aren’t particularly interested? The advent of digital advertising was supposed to be able take us away from the mass media wastage of TV and the like, where you blast millions of people with your message and hope it appeals to a handful. It is the interactive nature of digital media that is supposed to help advertisers target, entertain and most importantly, engage the consumer with meaningful and welcome messages.

So where is traditional display advertising going wrong? Click through rates tell us a lot about user interest and engagement. The current rates tell us that this traditional form of advertising is ignoring a major aspect of digital advertising,  the user experience.

“Smart advertising” is the next stage in display advertising. It is integrated in its placement, in that it appears in accordance with user need or action. It is directly addressing the user experience – and the results are dramatic.

Great examples include overlays or functionally integrated app searches(such as our App Wall) that are available when users need them and don’t crowd the app experience as traditional display advertising does. Rich media is coming of age and provides an immersive experience that will further enhance and re-captivate advertising audiences.

At LeadBolt we have been promoting high performance ad types for some time and I see that other innovative mobile advertising companies are getting traction doing the same.

The rewards are there, in this world, savvy advertisers are achieving click through rates that are a 15 – 30 times improvement on Google’s display statistics.

I’m sure the industry can be smarter and users will be the winners.

What's your opinion?