Display Ads Are Dead

On paper, a big display advertising campaign seems like a good marketing strategy to try. It sounds like an easy way to build brand awareness, and get your business in front of thousands of people who are in your target audience.

Quick question, though. When was the last time you clicked on a display ad? It’s been years for me, and I’m not alone. Adblocking software is on the rise. It’s not just for crotchety programmers who hate marketing anymore.

The number of people using adblocking software around the world grew by 41% over the last 12 months, according to the adblocking report by PageFair and Adobe. There are now 198 million people worldwide using adblocking software. That’s a lot of people who have opted out of annoying banner ads and popups.

On top of that, display advertising doesn’t work like it used to. I took a look at Google’s Display Benchmarks Tool earlier this week.

Here’s average ad performance from June, 2014 to June, 2015.

Display Advertising CTR Rates

Check out that high water mark in May of 2015, with a towering 0.2% average click through rate!

So not only do more and more people block ads, fewer and fewer people who do see ads are clicking through.

This is the average for all types of banner ads, including Standard Media (images and Flash video) and Rich Media (streaming video, applets, etc.) Not surprisingly, Standard Media ads tend to do worse than Rich Media.

Comparing Standard and Rich Media Ad clickthrough rates

Standard Media ads have an average clickthrough rate of 0.09%, versus 0.23% for Rich Media ads.

We see an average clickthrough rate of 0.13%. That’s 0.0013. That means for every 1,000 people who see your ad, 1.3 click through to your site.

And this is just how often someone clicks through. What about conversion rates? Let’s be optimistic and assume you’ve targeted your audience really well. Let’s assume your campaign converts at 10%, as opposed to the usual 2 to 3% quoted for e-commerce conversion rates.

Given a 0.0013 clickthrough rate and a 10% conversion rate, only 1 out of every 10,000 visitors becomes a customer.

What does this mean for marketers?

The days of traditional display advertising campaigns are over. If you need to grow quickly, you’re not going to get there by running a banner ad campaign. It just takes too long. Marketers have to be smarter about where they’re spending their time and money.

You’re better off spending your time and money trying other ideas, and marketers everywhere are realizing this. Publishers are, too. If users aren’t blocking display ads outright, they’re not clicking on the ones they do see. People don’t click on ads anymore, but they do read listicles.

This is why native advertising is on the rise.

Bear in mind, traditional display advertising campaigns can work. I’ve run successful campaigns on display networks like Google AdWords, BuySellAds, and AdBlade. Display ads can work, given the right message, the right medium, and the right audience. Like any marketing strategy, performance depends on the specifics of your offer and your audience.

If time is of the essence, you need a more creative approach. You’ve got to apply your lateral thinking skills to solve your marketing problems. This is how I think about traditional marketing versus growth. Given a long enough timeline, a steady display advertising campaign could pay off in a big way. And this kind of marketing still works for many businesses. That’s why display ad networks like BuySellAds and AdBlade are still in business.

And they’re also moving to native advertising. Because it works, at least for now.

If growth is what you’re after, you’ve got to stop trying strategies that don’t work. You’re not going to get where you need to be with a 0.00013 conversion rate. Strategies change over time, as an audience adapts and changes. The tools that worked ten years ago don’t work today.

I’ve heard marketing described as a game of inches. Growth can’t afford to be a game of inches. There’s just not enough time.

I'm Tyler, and I blog about marketing, programming, writing, and things I'm working on.

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