Nobody clicks on banner ads… or so I thought


The internet is full of advertising. If you’re reading the latest news online, there are adverts. Reading a tech blog? Adverts. Cooking dinner while following an online recipe? More adverts.

Showing advertising is how many free websites and apps earn their revenue. Banner ads – also known as “image ads” or “display ads” – come in all shapes and sizes. But there was one thing I used to believe about them that was completely wrong: They weren’t effective.

“Nobody actually clicks on banner ads,” I thought.

If you’d asked me a couple of years ago if display ads were useful, I would have said something like: “Display ads are good for reminding people of your brand, but you’re unlikely to get leads from them.” But data proved me wrong.

Would you believe me if I told you that display ads could actually be the most efficient source of leads you might be overlooking?

Now, I’m a big fan of search ads in AdWords.  They are incredibly targeted because they enable us to text show ads to people based on their exact search phrase.

But display ads are different. Display ads don’t appear in search engine results.  Instead they are the image-based ads that show on millions of other sites and mobile apps, including news sites, blog sites, forums, and thousands of apps. This means that people seeing the ads aren’t in search mode – instead they’re in reading mode or entertainment mode, and your display advert sits alongside that content.

This contributes to “banner blindness” – a phrase that refers to our mind automatically ignoring banner ads. The result is that display ads have a far lower rate of being clicked (Click Through Rate) than search ads, and leads to the impression that “Nobody clicks on banner ads”.

But a lower click through rate doesn’t mean these ads can’t be effective. Alongside a lower click through rate, display ads also have a very low cost per click, meaning you can get far more clicks to your website for the same cost when compared with search ads.  One electrician client we work with has an average cost per click of $3.25 on search ads, but just $0.12 on display ads!

To help combat “banner blindness”, instead of showing ads to random people we implement remarketing.  Remarketing means ads are shown specifically to people who have previously been on your website. And thanks to something called the Baader-Meinhof Phenomenon this decreases banner blindness.

The Baader-Meinhof Phenomenon is best explained like this: Have you ever found that after purchasing something – maybe a new car – you start seeing that model of car everywhere? Those cars have always been there, but you haven’t been aware of them before. Your subconscious mind filtered out that information.  However, because you have recently been interested in that model of car, your mind now recognises that as a piece of information to be consciously aware of, so you start to see those cars everywhere. That’s the Baader-Meinhof Phenomenon and it’s what makes remarketing so powerful.

For people who have previously been on your site, your ad is going to trigger familiarity and they’re far more likely to notice it on the page. As they see you ads over time, this will help them be more likely to remember your business and also more likely to click the ad.

But do these cheap ad clicks actually turn into inquiries?

The short answer is “Yes”, however it’s important to understand the numbers. Just like display ads have very low click through rates, they also have low conversion rates – which is measured by people either phoning or filling in an inquiry form after clicking an ad. With the electrician example above, some of the highest performing keywords had conversion rates of 18 percent and even 23 percent. Whereas the display ads had a conversion rate of just 0.81 percent. But that’s not actually the important part. The most important part is how much it costs per conversion from the display ads. With such cheap ad clicks each inquiry from the display ads only cost $14.66 on average, which was very nearly the same cost per conversion as the best performing keyword that had a 23 percent conversion rate.

What’s more, for this client, nearly 30 percent of all their leads come from the display ad campaigns. So the data proved me wrong.  People may not click on display ads very often, but display ads can still produce exceptionally good results, bringing in real leads at a low cost.


About Author

Josh Moore

Josh Moore is the managing director at digital marketing agency, Duoplus.