When banner and display ads first appeared online, users greeted this new ad format with high click thru rates (CTR). In Fall 2006, the CTR peaked at 0.21% on a global basis. The CTR declined since then though the format recorded a spike in April 2010. The average CTR has hovered at around 09.% for over a year and MediaMind research analysts say this equilibrium indicates that the ad format has found a place in the ad market.
These researchers have also found that consumers in the U.S. have a lower than average CTR, around .07%. They speculate this may be so because U.S. consumers are exposed to a higher than average display spending rate, about $120 a year. To improve the chances that users click on a display ad, researchers suggest that marketers take the following steps:
- Focused Content – Sites which offer focused content in a specific industry such as kids, technology or travel deliver a highly engaged audience. Consumers who visit these sites show a higher tendency to click thru on ads. MediaMind research shows that a lower CTR comes from advertising on general sites such as social networks.
- Large Ads – To compete for attention, display ads are going up against flashing video and sound delivered by rich media. One obvious way to grab attention is to increase the size of the banner ad. Consumers exposed to larger ads exhibit a higher rate of CTR behavior.
- Creative Optimization – MediaMind researchers recommend that advertisers seek the ‘wisdom of the crowds’ through a process call Creative Optimization. By uploading creative ideas to a server equipped with an algorithm that weighs the appeal of features like font or calls to action, marketers can get feedback on which elements will increase the CTR of a proposed ad campaign.
- Retargeting – There’s a fine line between reaching consumers with an ad campaign and annoying them and therefore wasting marketing dollars. But marketers shouldn’t assume that showing a target audience 1 impression is enough to generate a click-thru. Research shows that the CTR peaks at 2 exposures. And marketers should keep in mind that during any one display ad campaign, 82% of consumers see the ad 3 times or less.
Display ads must compete with rich media formats which, in the U.S., have a CTR of about 20%. But display ads clearly have an appeal and impact on consumers. Marketers who carefully design and target their display ad campaign will be rewarded with higher CTRs and conversion rates.[Source: Standard Banners Non-Standard Results. Mediamind.com]