The banner is not dead, it’s just diluted

Not a day goes by without someone proclaiming the death of the banner ad. The banner ad is far from dead, and we’re not saying this because it’s this site’s primary business model. There’s a less dramatic reason to explain why the stalwart of internet advertising is not reaching the big numbers of its print and TV counterparts: Quite simply, the banner is diluted.

It’s diluted in two ways. The first is obvious, and the second overlooked.

Dilution one (the obvious one): The busy webpage

The banner faces dilution on a busy webpage and is only one of many eye-catching choices for readers. This is unlike TV or radio advertising which is largely linear. On TV, there’s that ad at that moment and very little else. This isn’t really as big a problem as many think. The solution lies in digital advertising industries being more creative, creating ads that grab attention without being irritating or intrusive.

On the publishing side, better formats, placement and targeting is needed. But publishers are behind the innovation curve and it’s taking us a long time to get there.

Dilution two: A busy online marketing landscape

Then there is another form of dilution which may explain why banners aren’t seeing the big numbers. Quite simply, online banner advertising is diluted by the many other forms of powerful digital marketing available. The great fallacy is that people believe banner advertising is competing against traditional forms of advertising for spend. The truth is that banner advertising is really in a fight for a portion of its own digital spend.

Banners are just one of a range of marketing options at a company’s (or a digital agency’s) disposal. For example, if a company was considering an online push, it would typically look at and spend budget on a range of digital options such as Search Engine Optimisation (or what I like to call “online publishing”), social media, broad web development or developing microsites, creating corporate blogs, pay-per-click advertising, viral video content, email marketing, app creation… and so on. It’s a landscape that is expanding, changing and fragmenting: Every few years a whole new form of online marketing discipline emerges.

The chart below, listing a few of the options, brings it home (Source).

[ Click for full size image ]

So a digital budget is not limited to online display advertising. Typically, traditional forms of online advertising (TV, radio, print) do not face such dramatic dilution in their own industries. Put the full digital budget into the picture and it’s probably bigger than banner spend. That’s why many traditional agencies are confused by the digital landscape. The whole game has changed: It’s not just about advertising anymore. Advertising is really just a part of the picture.

We are also in the age where “every company is a media company” and companies, the advertisers, often boast websites with big audiences. They are, in fact, media companies by accident. Some companies are asking themselves: Do I really need to advertise on external online media publications to the same extent as before the digital era? I believe it is the wrong question to ask, but it is a question that is being asked.

Here’s a small anecdote of what’s happening: I read some time back that the UK’s National Health System (NHS) was considering no longer posting jobs on newspaper sites because of the high demand it was getting from jobs posted on its very own website. This doesn’t hold true for all companies or media, but it shows the paradigm has certainly changed. (And here is yet another example.)

A look on Alexa reveals that three of the big banks appear in the top 20 sites in the country. In that same list one media company appears. Corporates are publishing themselves because they are media entities in their own right.

But this does not mean the banner ad is dead. Far from it. We wouldn’t be in this business if we believed that. There will always be a demand for strong independent voices that readers trust. Only independent media can carry real credibility with readers.

When trying to make a choice, you’re not really going to place much trust in a review about a product by the very company who created that product because there is a conflict of interest. Readers want an independent and critical voice, one that carries credibility. These are the sites that companies and agencies build long-term advertising relationships with.

Those sites that provide that voice should attract the numbers and the advertising. And as for banners: Ad formats needs to get better, bigger, more creative and innovative. As they do this so their returns will increase — and so they will demand more of the digital pie.