iPerceptions: 'Old School' Ad Units Fare Better Than Emerging Media
The Montreal-based Web analytics and market research firm surveyed more than 14,000 visitors to leading media sites in August, and found that one of every four consumers clicked on text ads. The study also found that the consumers who were most likely to click on any ad tended to be the least affluent--raising the question of whether advertisers need to start using alternative methods to reach big spenders, and whether the click is actually the best metric for determining campaign success.
"I think the biggest takeaway from the data is that the current ad formats aren't very effective," said Jonathan Levitt, iPerceptions' vice president of marketing. "Brands are going to have to start looking at things like direct content integration and product placement. There's still a place for things like banners and skyscrapers, but it's much more about brand awareness than inducing conversions."
The study gauged consumer responses to text and display ads, as well as video and interactive units. Levitt said that "Google conditioning" was a key factor in why text links were likely to be clicked 25% of the time. "Consumers respond best to this particular ad format because they're used to seeing it when they search," he said.
Meanwhile, display ads were the second-most popular, with banners on the right side of the page getting clicked 20% of the time. Banners at the top of the page fared much worse, only garnering clicks about 12% of the time--a stat Levitt said could be attributed to "banner blindness." Still, even banners snagged more clicks than video or rich media units, which were only likely to get clicked 11% and 7% of the time, respectively.
"This was an eye-opener," Levitt said. "It's clear that video is not a platform or vehicle that people are likely to engage with, so it calls into question the monetization strategies of channels like YouTube and Hulu."
Video was also least likely to be clicked by affluent consumers--typically the targets of big-brand advertisers that have the budgets to spend on the more expensive units. Only 13% of the consumers that clicked on video ads made more than $150,000 annually. In contrast, nearly half of all video clickers brought home less than $50,000 per year. That correlates with the fact that the consumers who were most likely to click on video were mostly under age 25--another factor that Levitt said doesn't bode well for video. "These 18- and 24-year-olds may be the ones clicking on the ads, but they don't have the money to spend on the merchandise being featured," Levitt said.
In fact, propensity to click overall trended downward as the consumer's income level increased. On average, nearly 40% of consumers who were likely to click made less than $50,000 per year. Just 15% of clickers made over %150,000 annually.
Aside from highlighting the discrepancies between how advertisers spend their dollars online and the way consumers respond, Levitt said the study also raised the big question of whether the click should be the focal point for determining a campaign's success, regardless of the ad unit. "I'd think that a cost-per-action (CPA)-based model would be one way to go," Levitt said. "And perhaps looking at a more holistic measurement, including clicks, CPM, and other factors taken together."