Where the banner ad clicks are really coming from

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Where the banner ad clicks are really coming from

Thursday, April 17, 2008 7:20 AM | Blogging Technology Advertising

Most perceptive web advertisers have seen dwindling click through raters (CTR) on both banners and contextual ads. The rate has been on the decline for several years.

So where are the clicks coming from? I would venture to guess that the bulk of clicks are coming from new Internet users that have not been inured (yet) by the millions of ads that most seasoned web surfing veterans have seen over the course of their daily Internet activities.

When the novelty of annoying ads (like audio and video ads) wears off on these new users, they no longer click.

What this means to the online advertising industry? It means you have lost the long-time dollar spending users. These users are the ones most likely to spend money online. The in-your-face advertising will not work on this demographic of Internet users, subtlety is the key to reaching the users.

Of course, it will take the advertising industry a couple more years to figure this out, which by the time they do, the current click rates are going to bottom out and hard. Much like the print media is finally figuring out that they must embrace the Internet if they are going to survive.

Congratulations advertisers, you have lost the most valuable demographic. What you are getting currently, are Internet newbie's and broke school kids clicking on ads. Ha!

I have been involved with online publishing for over 10 years and I have seen the poor CTR trend for the last five or six years now. I have been warning fellow site owners that the trend will worsen. Some listened and many did not.

The trend I think that will grow will be more about branding and less about click through rates. While everyone else is trying to makes ends meet with pitiful CPC and CPA dollars, I will continue to sell CPM (cost per thousands) advertising and push branding. After all branding is what it is all about, whether it is online, TV or radio. An unforgettable brand will make much more than the easily forgotten (or very annoying) brands.

10 Comments

Comments

Posted by Sean on 4/17/2008 9:04 AM: Clicking advertisements on web pages was a poor concept from the very beginning.

Advertisers do not need branding to succeed in this attention deficit world. They need to have VALUE.

We loved eBay because it provided a way to get more bang for your buck. It was a VALUE driven website. Once eBay went public and became focused on raising profits at the expense of it's sellers they lost the Value that helped them succeed. As soon as an Overstock.com or Amazon open up the loyalty they enjoyed began to erode.

This is the same everywhere, you must offer VALUE. Want to get customers to click your AD's more? Pay them some of the revenue. After all web 2.0 is all about social media social advertising should also be prioritized.

Grocery customer loyalty cards work because they return a value to the customer. Internet advertising models must learn to do the same.
Posted by Anurag Gaggar on 4/17/2008 9:08 AM: I agree.
I think, similar could be the case with Search Engine Marketing Advertisements.
I've seen a lot of experienced users avoid clicking on sponsored links and a lot of the newbies searching for a very specific target - say "Capital One Credit Cards" - and then clicking on the Sponsored link where the first non Sponsored link also points to the same web address.
Posted by allen on 4/17/2008 9:52 AM: Yup, I agree completely with both of you (Seth and Anurag).

Virtual customer cards would be cool, I guess customer discount codes could be considered something of that nature.
Posted by proee on 4/17/2008 5:05 PM: Click the flying monkey.... Come on you know you want to!!!
Posted by allen on 4/17/2008 5:11 PM: Hi Proee, some of those ads are obnoxious aren't they. I for one try not to annoy people, as annoyed people aren't going to spend money at least that's MHO.
Posted by proee on 4/17/2008 5:26 PM: Even worse, are the splash pages that say "Please wait 15 seconds or click here." I swear they have at least a 5-second built-in delay even after you click the bypass link. I've almost punched my 30" LCD Monitor - but I can't take my anger out on such a nice display (maybe an old CRT).
Posted by allen on 4/17/2008 5:29 PM: Man I am so with you on the wait 15 second full page crads (crap ads).
Posted by proee on 4/17/2008 5:39 PM: Well, the sites I have in mind charges upwards of $10k a day for such 15-second splashes. If anything, they make me want to AVOID the product being displayed. Maybe we should start a list of all advertisers that use splash screens and have a boycott list made. Then let's see how many splash screens get sold!
Posted by allen on 4/18/2008 6:53 AM: Proee, that is a great idea however the mechanics of getting enough to boycott such sites wouldn't work that well and policing such a list would be burdensome. I think over time as more and more users steer clear of such sites and splash page advertising will do the job for us. When the stop working or traffic drops you will see less of them. Soon as one appears I hit my back button or home button (about:blank). I am sure I am not in the minority of navigating away from such annoying advertising.
Posted by nimrod on 4/20/2008 6:39 AM: I had been wondering about this as well as I am a publisher. My income from my blog's Adsense has been on the decline recently and your theory makes sense. The web has become "TV" for most people. We have lived through TV ads most of our lives and I think advertisers should reconsider the click-through model and focus more on the impressions-based model.