Banner Advertising, Click-Throughs & Social Media: Bolin’s Perspective
This is a response to Adam L. Penenberg’s article “How Much Are You Worth To Facebook,” which can be found here: http://www.fastcompany.com/magazine/139/loop-de-loop.html
The article is focusing on what the author views as an opportunity for these large social media sites to begin making money off their massive audiences like the search engines have done with keywords and websites have done with banner ads.
We have addressed the value of banner ads and their role in a campaign, as well as clarifying several points the author makes in this article that may be misleading.
The Value of Banner Ads
Articles supporting or devaluing banner ads are released as often as articles that support or devalue all forms of media. It all comes down to what the objective is for your online advertising campaign. If your goal is to build brand awareness, you will want to spread your message quickly to as many users in your target audience as possible and at an efficient CPM, which is what banner advertising can accomplish. With banner ads, you generate reach and frequency quickly to tell people a message, including those who weren’t aware of your message before – which is especially important for a new product.
Many studies have been conducted that illustrate the effectiveness of banner advertising in increasing brand awareness along with sales, website visits and time spent/pages viewed on advertiser websites. For example, the Online Publishing Association did a study with Comscore in January of 2009, called “The Silent Click.” The study used a control/exposed methodology to measure behaviors of consumers post exposure to an online banner ad campaign conducted by the 20 top display advertisers across a variety of industries. In the area of Consumer Packaged Goods (CPG) the study showed:
• The exposed group spent 14% more on CPG ecommerce than the control group.
• Large lifts in online searches for advertised brands and visits to advertisers’ websites (not counting immediate banner clicks)
• Large increases in minutes spent and pages viewed on advertisers’ website.
Specific Media, a network with robust targeting capabilities that Bolin partners with often, recently did a study measuring retail impact post online advertising campaign for a CPG client, using nothing but banner ads. This study showed a 58.6% lift in offline sales in the post-campaign period, and a lift of 86.3% in share of customer dollars.
Why “Clicks” and “Click Through Rates” Aren’t Important
In Penenberg’s article, he details click-through-rates (CTRs) and asserts in the second to last sentence of his intro that “it’s not about click-throughs anymore,” which is true…and it hasn’t been for a long time. Not since the internet and advertising on it stopped being a novelty.
Clicks are important if you’re doing a traffic-driving campaign that is specifically designed to get advertisers to your website. The media strategy here is paid search or banners purchased on a pay-per-click vs. CPM basis. CTRs aren’t important here because you’re using a mass amount of impressions in order to get a desired number of users to your site – visits to the site is the goal, and it doesn’t matter how many impressions are used to achieve this goal.
CTRs are not important in awareness campaigns because the goal is to put your message in front of the consumer where they spend their time online, similar to running a TV spot in a consumer’s favorite show or a print ad in a consumer’s favorite magazine. However, when the author talks about banner ads annoying users, he uses pop-ups as the example which is only one form of a banner ad and one that we would never recommend in any of our clients’ advertising campaigns.
The Role of Social Media
Social media is all about connections – with friends, coworkers, passion points such as sports teams, and even preferred brands. The connection you make with a consumer who “friends” your brand on a social networking site is far different than the audience you may reach with a banner ad which is why social media plays a different role in a campaign. We believe social media sites should be used to forge strong relationships through conversations with brand advocates – not for driving mass reach quickly. Social media is a longer term brand building effort.
Under the section “What Are You Worth To Facebook,” Penenberg discusses compensating consumers for participating with brands on social media sites. Our position is that to do this would ruin what these sites are all about – connections. People connect with people, groups, brands, etc. that they enjoy. Peer to peer endorsements are strong, and to know that your friend is talking about X brand because they’re getting something for it, rather than simply because they really like it, would take away much of the value of that endorsement. Sooner or later, we’d run into the same problem mommy bloggers are having – lost sincerity (also, the possibility of the FTC getting involved).
Summary
If click-through-rate is the only measure of banner ads’ effectiveness we would agree with the author. However, we use banner ads to build awareness (not to drive click-through rates).
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