Having started my career in 1994 building some of the very first commercial websites, I have more than 22 years of digital marketing game footage to draw upon. I even placed MasterCard's very first banner ad on Yahoo in early 1995. At that time, we were delivering click through rates north of 10% on a consistent basis.
My how times have changed. What astounds me, however, is just how ineffective banner ads are and yet how prolific they still remain. As the CEO of Trepoint, a digital marketing agency, I am often asked what we think of banner ads. My answer is simple, we don't recommend them nor do we take on banner advertising business. Between growing ad blocking technologies, massive ad fraud, and banner ad blindness, is it any wonder why the average click through rate is hovering at 0.06%? But because 63% of all digital media is bought programmatically, it's understandable why banner ads continue to flourish despite all the evidence that they are ineffective. So what are the alternatives?
Alternative #1: Influencer Marketing
In case you missed it, earlier this month I reported on a groundbreaking Nielsen Catalina Solutions study which highlighted the incredible impact of Influencer Marketing had on WhiteWave Foods. In short the results of the study showed that Influencer Marketing delivered 11 times ROI over all other forms of Digital Media. The study further provided a direct attribution between Influencer Marketing and in-store sales lift. Specifically, for every 1,000 impressions delivered through Influencer Marketing, WhiteWave Foods received $285 of incremental in-store sales.
So what is Influencer Marketing and why is it delivering substantially higher ROI? Simply put, Influencer Marketing is about sponsoring and supporting the people who your customers look to as subject matter experts. Whereas digital marketers like me used to hire celebrity spokespeople, today your customers trust well-known bloggers and social media pundits who may only have tens to hundreds of thousands of followers (instead of the millions we used to focus on).
If you're looking to learn more about Influencer Marketing, I recently did a keynote speech about it and have posted my presentation online. I'm a big believer in this methodology because it requires that the content come directly from the influencers you engage which, by definition, dramatically reduces the two largest expense areas in effective digital marketing: content creation and distribution.
Alternative #2: Native Advertising
Originally, I was NOT a huge fan of Native Adverting. The early pioneers of Native Advertising were not diligent about disclosing the advertising nature of native and there was a lot of unnecessary consumer confusion. While it's still not perfect, the recent federal mandates along with industry self-policing have helped clean up its act and now we're seeing a substantial rise of Native Advertising.
Like Influencer Marketing, Native Advertising is exponentially more effective than banner ads with 3rd party studies an overall 88.6 percent increase in brand awareness among those exposed to the campaign. As savvy digital marketers look for viable alternatives to banner ads, more and more of them are turning to Native Advertising. Moreover, programmatic native adverting networks such as Instinctive, are even exploring entirely new business models such as charging for time spent with your content rather than industry standard metrics of "impressions" which typically only require a partial view (i.e. 60%) of a banner ad for one second.
Changes in the way you measure the levels of engagement with your content will ultimately lead to better targeting and even better ROI from your Native Advertising investments, which are arguably already substantially more valuable than traditional banner ads.
Alternative #3: Give It Up For Free
Before anyone will buy from you, they must first know, like and trust you. How do you get someone who's never used your product or service to do that? The answer is to give your ideal customers something of value before you ever ask for the sale. What you are giving up for free will, of course, be different for every industry, but the core idea is the same. By giving something of value that no one else is willing to offer, you will stand out in a world cluttered with "me to" offers.
By giving it up for free, you are being disruptive to the status quo. In fact, it should even feel a bit uncomfortable and scary because you are taking a leap of faith that when your ideal customer receives this value from you that they will want more and, having had a great experience for free, they will pay you for your product or services.
This model can be seen in every industry and is usually the start of a massively high-growth company. Netflix, for example, continues to give you 30 days free of their streaming video service before they every ask you to pay. This model ultimately brought down the powerhouse that was Blockbuster. Google's Android operating system completely disrupted the mobile phone industry and knocked out several major players who had previously dominated the space (think Blackberry, Nokia, Motorola, Sony Ericson, etc.) Successful restaurants give entire meals away for free, Zappos was the first to give away free shipping BOTH ways, Wix gives website design away for free, and the list goes on.
While every industry may have a slightly different variation on the theme, the act of giving it up for free tends to be a disruptive business model that forces the larger players to respond (or ignore at their own peril).
Stop Your Banner Advertising Addiction
Regardless of which one you choose, the only bad choice is sticking to what's no longer working just because it's what you're comfortable with doing. Go to BAA (Banner Advertising Anonymous) if you have to in order to free your marketing dollars for something that actually works.
You've known for quite some time now that the banner advertising model is broken. It's simply irresponsible as a digital marketer to stick with a broken model when there are substantially better and more viable options out there. If you need a "sponsor" to help you with your banner advertising addiction, you can find one on our Facebook group. Together, we can kick this addiction and build a better digital marketing future for everyone--especially your ideal customers.