Commentary

Buying Banners = Burning Money

by Joe Marchese , June 29, 2010

MSNBC has it 100% right by banning banner ads on its site. Enough is enough. The truth is that most marketers who buy banners to achieve "reach" might as well be burning their money. I put reach in quotes, because the word should refer to the number of people that actually consume a marketing message, with the marketing message actually reaching those folks.

Today on the Internet it's easily possible to very cheaply buy a BILLION banner "impressions" "reaching" hundreds of millions of people, but how many people will actually be impacted in any way by a message delivered like this? On the Web, reach numbers are far too easily gamed.

Meanwhile, quality publishers like MSNBC trying to play the impression game are forced to make decisions that hurt the consumer experience just to compete, and do not necessarily deliver more value to their advertisers. Enough is enough. It's time to kick the impression addiction -- or, better yet, it's time to reset the definition of an impression to favor quality publishers.

I am not saying that all impressions are worthless, rather that in an Excel spreadsheet the worthless ones look indistinguishable from the good ones. I am also saying that even good impressions simply give marketers a chance for delivering their message to consumers. Effective media for marketers is the ability to have a consumer's undivided attention -- what they do with it is up to them.

Look at the ultimate advertising medium to date, television. Television commercials don't run on the side of the screen while you watch your favorite television shows. That would be a terrible consumer experience and less effective for advertisers. No one would think this is a good outcome, so why is it on the Internet?

It's true that you cannot count on an interruptive model, such as the television commercial, in order to deliver a consumer's undivided attention from the content he sought out to advertising content that pays the bills. But quality publishers should have no problem asking their readers/viewers to willingly engage with a reasonable amount of advertising in exchange for access to content. Publishers just need to be able to count this impression of a willing consumer's undivided attention differently from the bulk of impressions delivered that don't have the same impact.

Thoughts? As always, your comments (see below) and tweets (www.twitter.com/joemarchese) are appreciated.

banners, commentary

21 comments about "Buying Banners = Burning Money".

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Karen Dayan from Criteo, June 29, 2010 at 1:59 p.m.
One way to combat paying for unworthly banner impressions is to use a display advertising solution that only charges per click. For example, Criteo - offers advertisers relevant display banners that are personalized and served for each of your highest value customers. The best part is - you pay ONLY for those customers that return to your website. That way - you benefit from "branding effect" of the banner impressions for FREE while only paying for results. Learn how www.criteo.com
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Mike Kelly from LIN Media, June 29, 2010 at 2:03 p.m.

Sorry Joe...can't agree...your TV analogy is flawed in that Nielsen ESTIMATES ( yes loudly) what they deliver. Yes TV is and will continue to be a powerful medium...but banner and other new media offerings are measured as close to perfectly as possible. Banner ads still have relevancy...and more that any print publishing due to their accountability. Print hides behind the gutless strategy of selling "circulation" and "passalong". Premium publishers will continue to sell banner and clients will continue to see the value.

Mike Molnar from Glow, June 29, 2010 at 2:07 p.m.

Joe i always read your column and often agree, but this is way off. I am surprised that you, of all people, in the year 2010, are creating a foundation of reason for online advertising using current TV model as the core. What happens when TV and web collide, which as many predict, is not far off at all. So then we should just take down the billboards, the mag ads, the newspaper inserts, and rely on social? I totally disagree. Perhaps the ads are intrusive because the publisher's would prefer to cram WAY too many on a page, in addition to pushdowns, expandables, in page videos, peel backs... the list goes on.

Fact is, reach IS important, and effective when combined with a solid quality, engaging ad. One day the IAB will stop catering to publishers and start catering to advertisers, and we'll begin seeing a much higher standard of banners hit the market. The fact that bandwidth is through the roof compared to what it was 10 years ago, and we've gained a whopping 9k of file size to build units for our advertisers who pay pubs good money is a travesty. Until that happens, look at pubs... not banners, as to why this advertising bothers you so much.

PS - is TV the ultimate advertising medium? I have yet to execute a one click purchase from my remote control, other than to buy a movie from my cable provider.

Rick Mulholland from Novell Design Studio, June 29, 2010 at 2:08 p.m.

I agree on some points, disagree with others. And laughed when I realized that the e-mail which featured this post had a banner ad right on top.

Terri Skitch from BowTie, inc., June 29, 2010 at 2:11 p.m.

Were we supposed to ignore the banner ads in this Mediapost newsletter? Oh Dang-it, I guess nobody will be registering for OMMA.

Myles Younger from Canned Banners, June 29, 2010 at 2:13 p.m.

The old saying "I know half my advertising is wasted—I just don't know which half" is as true as it ever was. This is not a new problem in the advertising world and it may never go away. In business terms, advertising is a cost, hence it "burns money." Many of the same arguments above could be made for television, magazines, bus stop benches, and so forth. If substandard banner impressions are in fact worthless, market forces will cause them to eventually go away (advertisers won't see a revenue impact and publishers and ad networks won't make good margins). And if some portion of banner ad impressions are indeed dragging down campaign ROI, the ROI equation (revenue / (cost of creative + cost of media)) can also be rebalanced by lowering the cost of creative. This is what my company Canned Banners does. So while I don't agree that banner advertising is equivalent to "burning money," I do agree that the average ROI from an average banner ad campaign does not justify spending more than about $100 on creative. So if advertisers want to get their money's worth, they should check us out.

Carl Ludewig from Ludewig Multimedia, Inc., June 29, 2010 at 2:14 p.m.

Joe - I couldn't agree more. I co-founded a mobile ad company many years ago and my hope at the time was that it was an opportunity for full-screen, attention grabbing advertising. Imagine my disappointment that even there the market is evolved into microscopic mobile banners set along side content. I still haven't given up hope, though, on quality, entertaining creative worthy of full-screen attention. Glad to see someone writing about it!

Kirby Winfield from Dwellable, June 29, 2010 at 2:18 p.m.

Joe, a few issues:

"On the Web, reach numbers are far too easily gamed."

This just as is easily resolved by using technologies built to detect and prevent fraudulent or univewable impressions.

"I am not saying that all impressions are worthless, rather that in an Excel spreadsheet the worthless ones look indistinguishable from the good ones."

Well, you need better inputs in your Excel spreadsheet. Or <gasp>, a dashboard that actually allows you to see which impressions generated engagement, view time, dwell time, context, audience reached, etc. I am surprised you ignored solutions like ours which are relatively well-known to provide media optimization and to help solve the exact problems you call out in your article.

Adam Day, June 29, 2010 at 2:22 p.m.

It's not the banner that burns money it's the monitization model behind the banner ad. A banner ad on a fixed cost is probably the best form of advertising there is, as it fixes the cost and lets the market decide the value of the placement. CPM and CPC as a monitization model are major burners of advertising dollars and also an incentive for click fraud. Internet banners are still one of the best under valued forms of advertising as long as you can target and reach the right target market and consumer. www.retailpromotions.com

Joe Marchese, June 29, 2010 at 2:27 p.m.

@kirby - I didn't ignore, I just chose not to explore :-) Joking aside, my point is that the standard right now for impression is page load. Most publishers don't want to be measured on clicks, time spent, or some other form of engagement.

@mike - Agree that television is flawed in it's measurment, and has to use estimates, however, I am not using television as a standard on measurement, but rather on form. Form, being the act of transferring attention wholly to an ad.

@terri - ?

Drew Williamson from State Bar of Arizona, June 29, 2010 at 2:51 p.m.

Making a bad advertising decision is like burning money and poor choices regarding banner advertising design and placement are no different from other bad advertising decisions regardless of media.

However, if banner ads are well-designed and properly placed on relevant sites that hit an advertiser's target, then they have two major benefits: 1) Direct Response through Click Throughs; and 2) Branding Impact that Raises Customer Awareness and Intent to Purchase.

These benefits have been well documented in recent marketing studies. Here is a link to just one of many:

http://www.emarketer.com/Article.aspx?R=1007090

Susan makuch Brown from kbb.com, June 29, 2010 at 3 p.m.

I find it peculiar that half these posts are just plugs for their sites/technology/etc...everyone has an angle I suppose. The subject is relevant and definitely needs to be addressed - but only on an industry-wide basis. I think that one site standing alone (and in this case, it's not even all of MSN...) is not going to change an industry. Until advertisers are willing to agree to a fair price in a "non-impression"-based campaign, we'll never get there - publishers are incentivized to create more page views and until we can agree on a different approach -- together -- it's not going to happen quickly.

Corey Kronengold from NYIAX, June 29, 2010 at 3:02 p.m.

Gotta agree with Mike from Glow (as usual). Its not the size of the banner, its what you do with it.

With the proliferation of cheap inventory, there is an explosion of bad ads to fill it.

I'd like to see the IAB and OPA have a sit down to promote larger ad formats and move away from crappy inventory scattered all over web pages. They may have served their purpose in Web 1.0, but as we move into V2, V3 and beyond, its time for us to revisit how this whole interweb google machine works as a business.

Right now, the laws of supply and, well, even more supply are killing the ad market. Ad clutter is a problem for advertisers, but additional revenue for publishers. We need to get the advertisers, users and publishers on the same page (no pun intended) to create a highly valuable ad unit at prices that allow publishers to stay in business.

While I fully support their businesses, I think its a bad sign for the industry at large when the most exciting companies in our space are the ones that thrive on our own inefficiency, laziness and stupidity.

Durant Imboden from Europeforvisitors.com, June 29, 2010 at 3:10 p.m.

Maybe the best way to avoid "burning money"with banners is to run banners on better-targeted sites. For example, an ad for a new camera on PopPhoto.com is likely to get more attention from readers than an ad for the same camera on MSNBC.com, simply because Pop Photo's readers are interested in cameras and may even be researching purchases.

Gary Strauss from Tech Media Network, June 29, 2010 at 3:16 p.m.

Joe, nice column -lots of good thoughts resonate from your perspective. Thanks for sharing.

Richard Monihan, June 29, 2010 at 3:46 p.m.

The concept of "worthless" is questionable. Moreover, I looked at the MSNBC site and there are banners - but they are part of a larger "sponsorship" offering based on some style of page or site "ownership". Not a bad way to sell a quality product - for sure.

But it doesn't mean the banners are more valuable, if your article's points are correct. They are just positioned in such a way that they SEEM more valuable.

I believe ALL banners have some value. The problem is pricing out that value. If I have a camera I'm trying to sell, advertising it on MSNBC is a bad idea, regardless of how I'm trying to position the ads - sponsorship OR banner.

On the other hand, perhaps a banner ad on a well-known and heavily trafficked photo site is a good idea?

I will repeat a true story from my AOL days, when a client asked "why should I pay more for the impressions in your insurance area for my insurance product? Impressions on the internet are infinite!"

I replied "IF they were infinite, then they have absolutely no value - that's true. On the other hand, are you putting your product in front of the right audience - do you want to hit an infinite audience, or the CORRECT audience?"

They paid the CPM, and we delivered considerable value.

Banners are useful. You just have to make sure you don't pay a lousy price for a lousy audience.

Kirby Winfield from Dwellable, June 29, 2010 at 5:16 p.m.

@Joe - agreed.

and this just in, to support your point: MSNBC.com Can't Quit Banner Ads...
http://www.clickz.com/3640804

Daniel Redman from Evisibility, June 29, 2010 at 8:30 p.m.

It's easy to side with MSNBC because they are doing something different. The marketing concept behind banners, is now finding it's way to the Facebook page. @Danzarella refers to posted wall content by brands as driving 'ambient awareness'. Sound familiar? That's because it will later cycle into Ambient Blindness and then renaissance as Behaviorally Targeted Ambient Awareness. Banners don't work for poor measurers and bad creative, this holds true for all mediums. Don't beat up display so that you can pitch social, they are inherently cousins and the concepts bleed through.

David Jaeger from Global SEM Partners, June 30, 2010 at 2:08 a.m.

There's alot of performance marketing coming in on banner ads. As a DR advertiser, we are loving what Google's done to disrupt yet another industry. We wish there were other big players that could layer in contextual algorithms to increase relevancy, and do it on a cost for performance basis.

The problem with banner ads isn't that they don't work - they do... damn well.

The problem is that we've tried to take TV branding metrics and apply them to the web, where banner ads can be placed in multiple places, and don't "interrupt" <gasp> like they "should".

Luckily, many premium publishers are starting to run their ads anonymously on Google (not to ruin their premium inventory space). Unluckily, much of the premium space we've bought just doesn't perform as well as the niche targeted publishers.

Miguel Montoya from YconoArt Studio, June 30, 2010 at 5:35 a.m.

Banners since the beginning of Internet are, for most of users, avoidable sight interruption, ( dream TV) just like a couple of banners in this article. How many do care about? I'm not. BUT somebody already PAYED for this "impression". A waste, Just like in any traditional media may happen, NOT if I'd click on it truly. Is then when technology make sens.

Greg Hills from Varick Media Management, July 13, 2010 at 2:29 p.m.

"The issue seems to be the industrywide perception that while there may be a variance in quality of impressions, enough quantity can make up for it. What I am saying is that even an infinite number of meaningless impressions will deliver meaningless results. It is not the fault of any one point in the advertising value chain. "

Reasonable people can disagree about the general effectiveness of banner advertising, but I take issue with how you characterize the industry response to the differing quality of ad impressions. Most advertisers are aware of the challenges of sorting out good impressions from bad impressions, and they are taking action.

This is a technology problem, not a structural market issue. If you are recommending a product as a replacement for banner ads, that's reasonable. But its not as though advertisers are without tools to sort good impressions from bad.

Venture capitalists are investing heavily in this area of ad verification and there has been strong agency adoption of these solutions. I mention several ad verification solutions in this blog post: http://bit.ly/a80SyH