Are banner adverts (PPC) worthwhile?

[Mike Lewis]

How effective is banner advertising on a web page? Does it generate worthwhile revenue, or does it just annoy visitors? (Or both?)

For the benefit of anyone who is interested in this question, here are the results of some research (admittedly, not at all scientific) that a friend of mine has recently done.

Background

This person is responsible for a website that generates pay-per-click (PPC) advertising. The site has about 200 pages.

At the top of each page, there is a banner ad, extending over the width of the page. The banners are either static images, animated GIFs, or Flash components with some kind of animation or special effects.

Each page also has several text-only ads, mainly in the body of the page.

Figures

My friend collected the following figures for the last 13 weeks of 2010:

Total number of pageviews: 133,000

Number of clicks on banner ads: 85

So, fewer than 0.065 percent of visitors clicked on a banner.

By comparison, the number of clicks on the text ads was 1380 (= about 1 percent).

Conclusions (if any)

The above figures are somewhat surprising. You would think that a banner ad would generate more clicks than a text ad, given that it is more eye-catching.

Perhaps text ads are more effective because they come in blocks of four. In any one block of ads, there's four times the likelihood that a user will be interested in a particular product. Or maybe it's something to do with the position on the page. I don't know.

If the above figures are typical (I'm not claiming that they are),should banner ads be removed? On the one hand, they do generate some income. However small that is, it's better than nothing. On the other hand, would some of the visitors who clicked on the banners now click on the text ads? After all, text ads do seem to generate plenty of clicks. Maybe it would be good to focus on them.

Of course, the goal is not to increase the number of clicks, but to maximise revenue. It's possible that advertisers pay more for banner ads than text ads, so - in this particular case - maybe the banners generated more than 0.065% of the income. (I don't have any information about the actual revenue in this case.)

One final point. Getting rid of the banners (especially the animations and Flash) can only improve the overall user experience. It would tend to reduce page load times, and, most importantly, it would remove what some users see as a major irritation. Perhaps these improvement would ultimately lead to more visitors, which in turn would mean more revenue.

I'm really just posting this information in case anyone finds it useful, and in the hope that it will generate some discussion. I expect my friend will make his own decision about the future of his banners. (If he does, I'll let you know.)

Mike

 

[Scottish Business Owner]

Hi Mike,

Thanks for posting this, some really great insights

I take your point about the poor click through rate but what I would add is that surely a banner ad (which is typically graphic in nature) has other benefits other than just a click. You can do clever things with banner ads that while people wont click they'll remember enough to maybe visit the site etc in future.

I've read lots about ad blindness and it certainly does exist. When we take adverts for SBF we always encourage these clients to activately participate in both the forums and blog to help reinforce the banner ad. I think most people accept that a banner ad on it's own will provide very little return. The same could be said though of many other advertising mediums as well i guess.

Still a great post though and would love to hear others thoughts

 

[Dizzydiza]

As a normal computer user i.e. I surf my favourite websites including Scottish Business Forums everyday just to see who is saying what. Also as someone who doesnt have any ads anywhere as my business is too small to merit the cost of this kind of advertising, on the whole I tend to ignore nearly all advertising on websites.
It is very rare for me to click on anything at the side of the page even on subjects that are of interest to me. eg jewellery supplies and health products. Occasionally when I am googling for something I will click on one of the ads at the side to see if it gets to the information I am looking for.
My pet hate is the advert that either pops up in front of something I am reading or the ones where you accidently scroll over and it then expands.
I have briefly considered taking out the Face book adds but again I just feel I am not in a position to give my hobby business the full attention it could do with because of my home commitments.

 

[Kevin]

simple put no invest your money on marketing that has a better ROI. People suffer from AD Blindness and they ignore most of them.

 

[Mike Lewis]

Thanks for all the interersting replies.

, you made a good point about ads serving a purpose other than to receive a click. I suppose it's like the old story about TV commercials. If you see a commercial for PG Tips, you don't necessarily say to yourself: gosh, what great tea; I must remember to buy some. But the next time you're in the supermarket and you go to buy tea, you're more likely to buy PG Tips - because it's a familiar brand name - than some low-profile make that you've never heard of.

Regarding ad blindness. Yes, this is obviously an important factor. But the point is that these PPC publishers make their money (if any) on the one percent or half percent of people who do click on the ads. Never mind that the vast majority of us ignore the ads. There must presumably still be enough clicks to make the whole thing worthwhile.

For me, the most interesting question is whether to favour banner ads over text ads - and what other factors affect the click-through rate.

Mike

 

[Kevin]

Thanks for all the interersting replies.

, you made a good point about ads serving a purpose other than to receive a click. I suppose it's like the old story about TV commercials. If you see a commercial for PG Tips, you don't necessarily say to yourself: gosh, what great tea; I must remember to buy some. But the next time you're in the supermarket and you go to buy tea, you're more likely to buy PG Tips - because it's a familiar brand name - than some low-profile make that you've never heard of.

Regarding ad blindness. Yes, this is obviously an important factor. But the point is that these PPC publishers make their money (if any) on the one percent or half percent of people who do click on the ads. Never mind that the vast majority of us ignore the ads. There must presumably still be enough clicks to make the whole thing worthwhile.

For me, the most interesting question is whether to favour banner ads over text ads - and what other factors affect the click-through rate.

Mike

I would say definitely text ads before banner ads as they have a higher click through rate as are less perceived as ads(and less expensive to create). In terms of people making money on banner ads what you have to remember is that a lot of these are by big brands who aren't interested in clicks at all.

They want saturation to increase their brand. Which was mentioned in the example with PG Tips. If you have the budget I would also consider video advertising , its the future.

I would suggest using AdWords to perfect your ads before you even consider the content network.

 

[Mike Lewis]

Kevin,

I don't disagree with what you say, but it is addressed to the wrong audience. You are talking to the advertiser. I'm trying to see things from the point of view of the PPC publisher - the guy who runs the website that carries the ads.

Actually, there is one point I don't agree with you on - the user of video ads. If you can't get your message over with a short piece of text or a banner, you're never going to persuade someone to voluntarily sit through your marketing video. I certainly wouldn't. Would you?

Mike

 

[Kevin]

Kevin,

I don't disagree with what you say, but it is addressed to the wrong audience. You are talking to the advertiser. I'm trying to see things from the point of view of the PPC publisher - the guy who runs the website that carries the ads.

Actually, there is one point I don't agree with you on - the user of video ads. If you can't get your message over with a short piece of text or a banner, you're never going to persuade someone to voluntarily sit through your marketing video. I certainly wouldn't. Would you?

Mike

Your totally missing the point.Video ads are far more persuasive and can connect with your audience more on an emotional level which is the part of the brain we use to purchase.

Google are investing greatly in video ads so they seem to see it as important. Also YouTube advertisers have seen great increase in ROI of video advertising since Google introduced it.

Also great benefits of video that I won't go into detail here.

 

[Mike Lewis]

Video ads are far more persuasive and can connect with your audience more on an emotional level which is the part of the brain we use to purchase.

That's undoubtedly true - provided the person agrees to view the ad in the first place.

As I said earlier, I'm trying to see this from the perspective of a PPC publisher. If site visitors are reluctant to click on a banner ad, surely they'd be even more reluctant to click on a video ad.

Mike

 

[andybrowne]

very informative topic

 

[Pete Brindle]

I have a bit of experience using PPC adverts and I have to say I'm not really happy with the results at the moment. I just don't think the audience are targeted enough, however if there was some way to rectify this, it would be a lot better.

 

[Gemma Rowlands]

I used to try and earn money from clicking on ads when I was in my teens, and I did sometimes sign up to websites based on what I'd seen, but I don't really think the sign up rate would be worth paying a fee. Mind you, it must be sometimes, or people just wouldn't do it would they!

 

[Pete Brindle]

I used to try and earn money from clicking on ads when I was in my teens, and I did sometimes sign up to websites based on what I'd seen, but I don't really think the sign up rate would be worth paying a fee. Mind you, it must be sometimes, or people just wouldn't do it would they!

It depends how much each sign up is worth. Some websites will offer say £50 for each new person who places an order with them, and if that's the case then the 50p it can cost for 1,000 clicks (or whatever it is these days) could well be worth it. There are also things called traffic exchanges, where you click other people's links in return for clicks on yours, but that would obviously mean that you had to spend a lot of time just clicking not achieving all that much, and as I say, I'm not entirely sure how useful something like that would be anyway.

 

[Gemma Rowlands]

It depends how much each sign up is worth. Some websites will offer say £50 for each new person who places an order with them, and if that's the case then the 50p it can cost for 1,000 clicks (or whatever it is these days) could well be worth it. There are also things called traffic exchanges, where you click other people's links in return for clicks on yours, but that would obviously mean that you had to spend a lot of time just clicking not achieving all that much, and as I say, I'm not entirely sure how useful something like that would be anyway.

I have seen traffic exchanges in the past, I used them once or twice to get views on my YouTube videos as a teenager - but got so many nasty comments from people I stopped doing it! Even though I genuinely don't think my videos were all that bad!