17 Reasons Why Banner Ads Are No Good and The Rise of Ad Blocking

The first banner ads were published October 27, 1994 on the Hotwired.com website, according to Wired magazine. The ads promoted Volvo, Club Med and a dozen other companies. [1] For the first time advertisers could actually know how many people saw their messages and, even more important, how many clicked to get more information. From that point forward, banner ads became the most popular form of web advertising.

But over time, the effectiveness of banner ads began to suffer from dozens of flaws inherent in their design. Here’s why banner ads have largely gone the way of dinosaurs.

Why They’re No Good for Viewers

1. Just as traditional radio and TV advertising is interruptive in nature — it competes with whatever you’re doing to gain your attention — banner ads took that annoying tactic to a stratospheric new level. Many banner ads were posted in gaudy, highly contrasting colors. Designers upped the ante when they realized that flashing, blinking ads compelled people to focus on their message. However, people quickly began seeing such ads as more than interruptions; they viewed them as invasive and began ignoring them, even hating them for their disruptive nature. The modal interrupt type of ad — one that darkens the entire screen with a pop-up, usually asking you to subscribe to something — might be considered today’s version of a banner ad that is impossible to ignore.
2. Akin to the blinking and flashing ads, research in 2004 found nine other online ad characteristics that were the “most hated” by 605 users surveyed. [3] Among those, ads that try to trick a visitor into clicking; ads that have no “close” button; ads that cover up content you’re trying to see; ads that occupy most of the page…and others. Again, these are all misguided attempts to interrupt the website visitor. One user annoyed by ads that automatically plays sounds replied to the survey as follows: “IF ANYTHING COULD BE WORSE THAN POP-UPS, THIS IS IT. I HATE THIS AD. HATE HATE HATE.” Needless to say, those tactics render online ads nearly worthless.
3. Many banner ads are simply not relevant to website visitors. A visitor seeking information on a health matter, for instance, finds no value in an ad for an automobile or a discount cruise ticket. Hence, the click-through rate for banner ads has plummeted from its initial high point to microscopic levels.
4. According to ad firm InfoLinks, website visitors have perfected “Banner Blindness.” [7] They read a site’s content but avoid the ads.
5. A full 50 percent of web users never click banner and other display ads. Another 35 percent click on five or fewer ads each month.
6. Only 2.8 percent of users find ads are relevant.
7. Only about one in twelve (8 percent) of Internet users account for 85 percent of clicks.
8. Banner ads slow access to websites. Ad serving companies (like Advertising.com, AdBlade, BlogAds and others) automatically insert ads into pages as they’re trying to load.
9. Only about half of all banner ads served are ever seen by human eyes because they are positioned below the area in view on a user’s screen. That’s about as good an illustration as any of John Wanamaker’s famous quotation: “Half the money I spend on advertising is wasted; the trouble is I don’t know which half.”
10. Banner ads invade website visitors’ privacy by tracking their online browsing without permission. [12] Frustration with spying and stalking by ads has led to the popularity of browser extensions like Privacy Badger, which prevents ads from collecting users’ browsing information. [13]
11. A study in 2014 demonstrated that for publishers, online ads can cost more money than they bring in. The majority of ads earn publishers $0.10 to $0.80 per 1000 impressions (CPM); however, the study estimates that bad ads ultimately cost publishers up to $1.53 CPM. While ads may generate some money for publishers in the short term, bad ads end up turning away users and losing money in the long run. [14]

Why They’re No Good for Advertisers

1. The most common measure of a banner ad’s effectiveness is the click through rate (CTR). People clicked the first banner ad AT&T posted in 1994 some 44 percent of the time. [2] The ad took those who clicked on a tour of art museums around the world, suggesting that AT&T was a company that could “transport” people over vast distances using the Internet, just as they had done a century earlier with long distance telephone networks. However, the CTR plummeted over the years.
2. Just ten years later, a 2004 study found average CTR had fallen by a factor of ten to only 0.44 percent. [4] Add another ten years and by 2014 CTR’s had collapsed to between 0.07 percent to 0.1 percent, depending upon the product or service being advertised. [5] As Ben Norton points out, “You’re more likely to survive a plane crash than click on a banner ad.”
3. Content marketing is taking over the web and is more effective than banner advertising, for several reasons. To name just a few…
4. Content marketing strives to answer questions and provide help to prospective customers. Everyone knows the only aim of a banner ad is to sell something.
5. Content marketing is not interruptive in nature. Prospective customers find content through search, through opted-in email campaigns and other methods. Content marketing is designed to help prospects, not to sell to them.
6. According to marketing experts at DemandMetric.com, content marketing produces three times as many leads as traditional marketing techniques. [6]

The Rise of Ad Blocking

All of these factors have led to the wildly popular ad blocking plug-ins available for most web browsers. AdBlock and AdBlock Plus are widely available for Chrome, Firefox, Opera and other browsers. Apple has approved plug-ins for its Safari browser. Ad blockers are available for PCs, Macs, mobile phones and tablets.

All of these plug-ins act as a firewall between the world wide web and your browser. A large open source community has assembled and continually curates a database of ad serving companies so the ads they send can be blocked rather than displayed on your screen.

Blocking ads certainly gives users a more pleasant experience. On Facebook, for example, an ad blocker can eliminate an entire column of distracting ads. But for web site operators and other publishers who are accustomed to earning money in return for displaying ads, ad blockers have had a significant impact on their revenue. According to a report [10] from Adobe and PageFair, $21.8 billion dollars were lost to ad blockers in 2015.

With some 16 percent of U.S. users blocking ads (that’s about 45 million monthly active users), the ad industry is taking a real hit. And not only in the U.S. In the EU, Greece has the highest number of ad blocking users, while ad blocking in the UK increased by 82 percent in the last year. Europe’s ad blocking users increased by 35 percent to some 77 million users. [10]

The Internet Advertising Bureau, the de facto, non-profit group that establishes guidelines for Internet advertising, is working hard to combat ad blocking. Various websites, Forbes.com being one of the more notable, detect ad blocking plug-ins and prevent users from entering the site until the ad blocker is turned off. For sites that adopt that strategy, using an ad blocker limits the content a user can access.

The debate will no doubt continue with advertisers, publishers and website owners facing a drop in revenue because ads are blocked. On the other hand, people will argue [11] that ad blocking brings more than just the satisfaction of eliminating ads; it may actually encourage the advertising community to stop creating annoying, irritating and interruptive ads and find a better way to promote its products and services.

The most recent statistics on adblocking on Desktop and Mobile browsers is reported by KPCB. Over 220M (16% Y/Y growth) of desktop users and 420M (94% Y/Y growth) of mobile users block ads:

A Better Alternative

We noted a few facts that differentiate content marketing from banner ads in the paragraphs above. Content marketing is enjoying a resurgence because it relies on helping prospective customers rather than selling to them. Over time, being helpful builds respect and loyalty — so the theory goes.

Much like the gentler approach content marketing is bringing to the web, micropayments offer a practical, simple alternative to banner advertising. Micropayments enable you to charge small fees (as low as 25¢) for your premium content in way users find smooth and painless. Micropayments can become a direct substitute for the ad revenue you’re losing to ad blocking.

The key to using micropayments is building a paywall that lets you place specific content (text, graphics, video) behind the wall. Until recently implementing a paywall and deciding how to link certain content pieces to it required significant programming. Now though, the Drizzle paywall simplifies the entire process.

• No technical knowledge necessary. Drizzle provides the robust micropayment and subscription platform so you can focus on content. You can start right now by dropping a bit of code into your website. If you use WordPress, Drizzle has a convenient plugin.
• Audiences easily pay a la carte for content. Visitors who aren’t ready for a full subscription pay for only the content they want.
• Easily implement subscriptions for visitors who prefer unlimited access to your premium content, and give them the convenience of Drizzle’s one-click subscribe/unsubscribe feature.
• No need to decide the right pricing for your work. You simply specify performance metrics and Drizzle will automatically remove the paywall from content that does not meet your sales goal. Drizzle also dynamically adjusts pricing to maximize your revenue. Based on Drizzle’s metrics, you’ll learn which type of content your users love.

Learn more at https://getdrizzle.com and recapture the revenue you’re missing due to the ever-growing army of ad blocking users worldwide.

Are you a blogger or publisher? Learn more about content monetization: http://blog.getdrizzle.com

Sources:

1. http://www.wired.com/2010/10/1027hotwired-banner-ads/
2. https://hbr.org/2013/02/stop-selling-ads-and-do-someth/
3. https://www.nngroup.com/articles/most-hated-advertising-techniques/
4. https://core.ac.uk/download/files/58/90170.pdf
5. http://moosylvania.com/blog/anyone-give-st-banner-ads/
6. https://www.demandmetric.com/content/content-marketing-infographic
7. http://www.infolinks.com/blog/infographic/the-banner-blindness-infographic/
8. https://contently.com/strategist/2015/09/04/13-stats-that-should-terrify-cmos/
9. http://blog.hubspot.com/marketing/horrifying-display-advertising-stats#sm.00000h4nbyyv4yferunuvba1otlxg
10. https://downloads.pagefair.com/wp-content/uploads/2016/05/2015_report-the_cost_of_ad_blocking.pdf
11. https://adblockplus.org/blog/the-devastating-effects-of-ad-blocking
12. http://www.digitaltrends.com/computing/how-do-advertisers-track-you-online-we-found-out/
13. https://www.eff.org/privacybadger
14. http://journals.ama.org/doi/abs/10.1509/jmr.13.0439