How to display advertisements for best results

Display Advertising

When it comes to online ad spending, about a third of web ad budgets are devoted to display advertising. For our purposes, we define display advertising as any type of web advertising that isn't a text ad; that includes banner ads, image ads, video ads, even those ads that creep down or across the page of their own volition.

The very first online advertising, back in the 1980s, was banner advertising; for the record, these ads were on the pre-Internet Prodigy network, promoting products from co-owner Sears. On the Internet proper, the first clickable ad would be a 1993 banner ad on the old GNN (Global Network Navigator) site, promoting a Silicon Valley law firm. The thing is that display advertising happens to be a big part of the online marketing mix and stays so today. Precisely how you employ display advertising depends on your own particular goals and, to some extent, your creativity.

Are Display Ads Effective?

Banner advertising is big business and becoming bigger. From those first web banner ads in 1994, display advertising grew to become the economical foundation of the online advertising industry throughout the rest of the decade. But ten years later, banner advertising is again on the rise, led by most of the same players who dominate the PPC advertising industry Google, Yahoo!, and Microsoft.

Sizing the Display Advertising Market

How big is the banner advertising market? The Internet Advertising Bureau (IAB) estimates that banner advertising represents in regards to a third of the USD 20 billion or so online advertising market in the U.S., or close to USD 8 billion in revenue. That's second and then search advertising, which accounts for about half of online advertising revenue.

Display advertising's share of the market is rising slightly, particularly with the easing from the so-called Great Recession. During the economic downturn of 2008-2009, many advertisers switched from relatively expensive display advertising to lower-cost PPC text ads. With the economy returning, advertisers are shifting a few of their dollars to display ads.

Judging the potency of Display Advertising

Know, however, that even as display advertising seems to be increasing in popularity, additionally, it appears to be decreasing in effectiveness at least as measured by click-through rates. One chief example of this is a March, 2010, study by research firm comScore, which found that the percentage of U.S. Online users who clicked display ads a minimum of once a month fell from 32% to 16% over a 20-month period ending in March, 2009. That's not necessarily a good thing.

However, counting clicks is just one way to measure the effectiveness of banner advertising. Unlike PPC text ads, display ads in addition have a brandenhancing function. So as comScore Director of Industry Analysis Andrew Lipsman said, measuring the success of a display ad solely by its clicks "grossly understates the importance of an advertising campaign."

That is, some potential customers remember an ad without clicking it; it has impact from being viewed without necessarily being clicked. Research has found that merely taking a look at a display ad increases the likelihood that a viewer will later search for the brand or make an order. To that end, many display ads are aimed solely at building brand awareness; of these imagebuilding ads, clicks are relatively unimportant.

Quantifying this, a Yahoo! study found that 78% of the sales effect from display advertising comes from people who view but do not click display ads. Only 22% from the sales originate from those who do click the ads.

When you should Employ Banner advertising

Knowing that display advertising has impact even (otherwise especially) when people don't immediately click the ad, how in the event you incorporate banner advertising in your company's online marketing mix? While display advertising can be used to drive direct sales of a product or service, it's better used to raise awareness of a product or brand. That is, banner advertising is primarily a brand-building vehicle.

As a result, you should use display advertising to push a higher-level brand or product message. Use display ads to build or reinforce your brand or to introduce new products or product lines. Don't expect a sizable sales increase to instantly result. If you do employ display advertising to drive network marketing, be prepared for extremely low click-through rates. Most display ads have CTRs less than 1%, which isn't likely to drive a lot of traffic.