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Banner ads die as interactive video ads thrive

Could the old faithful stalwart of digital media marketing be in grave danger? Are big brands beginning to take their funding away from a Very Marketing 1.0 form of advertising and placing it in the hands of a more engaging form of advertising? All indications are pointing towards a very big affirmative. But the old banner ad is not dead just yet!

In the beginning
When the world of online marketing was very much in its infancy; and offline marketing techniques were being forced online — the banner advert was the cutting edge of digital advertising. Online media sales were thriving and the banner ad was the vehicle. You could buy skyscrapers on block banners and headline banners.

Banner ads gave the advertiser the opportunity to track their campaigns more effectively as each click could be tracked from source through to completion per visitor.

Banner ads thrived.

Then things changed
The internet changed and that way in which we interact with it changed as well. Our needs and expectations went through the roof. We demand more and more engagement from our digital lives. We want to see our most loved content brought to life so that we can consume it there and then.

Banner ads don’t give us that flexibility; banner ads don’t give us interaction and according to an eMarketer report, many big brands seem to agree.

Display advertising is not the only big loser in the way in which media is being bought and consumed. Advertisers in the US are planning on moving a massive 41% of their print advertising budget to online video advertising. Broadcast TV (29%) and display / banner ads (24%) round off the top 3 biggest shifts in budget for 2012.

What does make for interesting reading is which mobile platforms advertisers were buying digital ads on; compared to which publishers were offering video advertising real estate.

The biggest percentage of advertisers buying video advertising were utilizing the iPhone and iPad as their mobile vehicles. What is interesting to note is that only 35% of publishers actually allowed video adverts on their platforms.

There is a distinct brand adoption lag on the side of the publishers who are not keeping up to date with where their advertisers are looking to spend their money.

One theory for this could lie in the publishers not wanting to move away from their much loved cost per impression costing model. With a banner advert; simply having the image load was enough for the publisher to claim that they had fulfilled their promise – all clicks were merely a bonus! But with a video ad; the only way in which the publisher can say they have successfully delivered the ad, is if it was played! This is where the highly lucrative Cost Per Impression model falls to the floor and publishers will be forced to use a Cost Per Play (Cost Per Click equivalent) model.

A further interesting note is that there is no 2011 data in the above table for mobile video advertising. Could this be, especially in the US, because of the sheer penetration that Apple has with their iPad and iPhone products?

What to use online video for
US advertisers, at least, seem to have a very clear indication for what they want to use video advertising for Engagement.

The major driver for why so much spend is being taken away from banner advertising, print and broadcast TV. There is simply no engagement in these media – they are old school marketing 1.0 broadcast media that talk to us – they don’t engage in a conversation with us which is what consumers are demanding today!

Author | Jonathan Houston

Jonathan Houston
Jonathan Houston is passionate about digital marketing and digital strategy. During the day, Jonathan is the Head of Digital Marketing for HKLM. Jonathan's work at HKLM includes strategy conceptualization, focusing on the alignment of digital marketing to business strategy as well as assisting HKLM's clients on fulfilling their digital... More
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  • Excellent article.  As a media buyer specializing in print publications, I would compare banner ads to   display ads in print.  The readers eyes are trained to literally tune them out due to the large volume of them on almost every site they visit.  Banners offer nothing to entice a click through.  Video ads are another story.  They are interactive and often entertaining.  Often educational, as well.  How can banner ads compete with that??!!

  • Great Article !
    Without a doubt, soon the bar will be too high for banners. Interactive formats, led by video’s rapid grow, will shift the big dollars to new better models.
    for the next years, it is all about engagement..

  • Anonymous

    Rather than being in danger, I think it’s more the case that traditional banner ad formats are in need of a major overhaul.

    I certainly agree that we need to move away from the old – and ineffective – CPM model. Fortunately, some of the more enlightened online media companies are specialising in cost per engagement (CPE) advertising. This works well in conjunction with expandable ad units, and the brand is only charged after the full ad has loaded on the screen. Engagement rates are also proving more effective than click throughs, delivering at a rate of 1% compared with industry standard for CTRs of 0.03%.Of course, this is fairly meaningless if the content of the ads is still not engaging the consumer. The great thing about larger expandable ad formats is that they can include a greater range of content, particularly video. The experience is more akin to watching a TV ad, the full scree is utilised as opposed top a corner!For me, there is another issue that is also clouding this debate – the way publishers layout their webpages. Most sites these days are a muddle of conflicting commercial messages. With so many ads competing for attention on a page, not only is content being devalued, but the advertising itself does not standout and is often completely ignored.Online solution providers really need to focus on eliminating webpage clutter and create advertising that engages the target audiences & compliments the content consumption experience. This will drive engagement and help to reinvent an ailing online ad format. Who knows, we might restore the trust that’s been eroded between consumers and online marketing.

  • Willpeels

    A lot of online video ads are “pre-roll”, when you watch a youtube video for instance. Isn’t it marketing 0.0 ? I mean we are just adapting the TV model to the web. It’s sure efficient in terms of awareness but still has low engagement value and no interaction at all. So the only thing that it brings to brands is the fact that people actually watched the ad. This is not engagement…

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