Banner Ad Location Effectiveness Study: Research | WebReference

Banner Ad Location Effectiveness Study: Research

Research Sources and Findings

Banner Ad Placement Study

Summary of Major Findings

Main Topic
Forrester Research
  • Web has a huge potential for building customer relationships, measurability and speed.
  • Advertisers like the medium because they can tell how well their ad is doing on a weekly basis: immediate statistical research.
  • Buyers of advertising space want the method of payment to change - to be based on click-through rates.
Respondent quotes:
  • "Running your logo doesn't do squat. For example, with our 'You Can Bank At Home' ads, the response rates are higher than our name and logo ads. People are more likely to click to find out about a product than to find out about our company." (commercial bank).
  • "Burnout rate for an ad is faster on the Internet. People go back to the same page on the Web more than they do to the same page in a magazine." (Computer Company)
  • "An Internet ad is most effective when it is integrated into an environment." (Apparel company)
Advertisers' issues
Who's Marketing Online - "How to Build a Better Banner AD"
  • 4 Most powerful letters in direct response = FREE.
  • Simplicity sells; graphics should enhance the message, not distract from it.
  • Animation may draw attention to the ad at the expense of the site.
  • Good banners must contain an attention-getting element, a call to action and a reason to click through. Need content that ignites clicks. Tell them to give you a click.
  • Like email, banners should carry your company's signature.
Banner advertising rules
Marketing Week, "Net advertising 'blip' masks...", 12/31/96
  • Total advertising spending on the Web reached $66 million for the third quarter of 1996, up over 40% from the previous period. Predict $300 million for all of 1996, $1 billion next year and $5 billion by 2000. Most of the ads are dominated by hi-tech brands and the promotions of the Web software companies and search engines.
  • Display ad revenue is currently growing strongly, but future ad revenue will come from other forms of communication and transactions with customers.
Advertising spending levels
Washington Post, "Speculating in Cyberspace", 1/23/97
  • $300 million spent on Internet advertising in 1996, but more than two-thirds came from Internet marketers and telecommunications companies.
  • Claims that Microsoft may be one of the only companies making money on the Web. Time-Warner is losing millions on its Pathfinder Web site.
Types of advertisers
Business Marketing, "Study Shows Big Lifts From Animated Ads.", 11/1/96
  • Study by ZD Net found that animated ads generated click-through rates at least 15% higher than static ads, and in some cases as much as 40% higher.
  • Claim that more people notice and pay attention to the ad if it has animation, even if they don't click on it. They are more likely to click for more information if the animation is done in an effective way (emphasize what product is about).
  • Even with the animation, an ad must have a strong, well-crafted message and a clear call to action. The animation does not take the place of response-driven copy and a creative idea.
  • There's two degrees of bad when it comes to animation: 1) animation that takes a long time to download, and 2) poor copy.
Advertising effectiveness: animation, message
Interactive Marketing News, "Delta Airlines Uses Internet Contests to...", 11/15/96
Hosting online contests promotes web users to visit a site repeatedly. Can use partners to link to site.
Online contests
New York Times, "Trade Groups Propose Web Banner Guidelines", 12/12/96
The Coalition for Advertising Supported Information & Entertainment and the Internet Advertising Bureau (two trade organizations representing buyers, sellers and producers of Internet advertising) issued the first voluntary guidelines for creating banner ads.
Banner guidelines
  • Study found that after the fourth impression, response rates dropped from 2.7% to under 1% (banner burnout).
  • Focus on four important issues which are critical to successful advertising (creativity, targeting, frequency and content).
  • Simple animation can increase response rates 25%.
  • Cryptic messages may increase click-through by 18%, but they may not attract the right audience or reinforce branding.
  • Using questions can raise click-through by 16%.
  • Phrases such as "Click Here" tend to improve response 15%.
  • Offering free goods or services generally improves click-through.
  • Bright Colors more effective.
  • Sense of urgency messages decrease response.
  • Banners at the top of the page are twice as effective.
Advertising effectiveness: creativity, targeting, frequency and content
Sun-Sentinel, "Sportsline USA Executive ..." 2/3/97
7 Rules to Successful Banner Advertising
Successful banner ads lie somewhere between direct marketing and traditional print work. "Good design and good marketing are totally different," said Kenneth Dotson, Vice President of Marketing with SportsLine USA. Successful banner ads lie in-between. SportsLine USA has been doubling the average industry click through, hitting upward of 5%.
  • Dotson's 7 rules to successful banner advertising:
    1. Use color.
    2. Use animation that doesn't slow downloading of the ad can attract attention.
    3. Use keywords.
    4. Keep it simple.
    5. Keep it relevant.
    6. Include a call to action.
    7. Test. Dotson and his staff continually test and chart the performance of their banners, even - or especially - during the first day of placement.
Banner advertising rules
WebWeek, October 23, 1996
5 Tips for Effective Banner Advertising
  1. Put your banner at the top of the page. Banners down the sides don't do as well in terms of generating click through.
  2. If possible, bracket important content between two banners.
  3. Make banners big. The more pixels, the more likely surfers are to click through.
  4. Put banners on the home page, if possible. Banners on the home pages generate more click through than banners on the pages deeper within a site.
  5. Keep the advertising message close to the content of the page. Ads that relate closely to the content get more hits.
Banner advertising rules
Seattle Times, 10/6/96
Paying for Advertising
Procter & Gamble's experience indicates that advertisers will be able to strike different types of deals depending on whether they pay for impressions, click-throughs or, someday, actual sales.
Payment method
Interactive PR, "The 'Sweet Spot' in Banner Advertising" 9/9/96
A study conducted by KRC Research & Consulting found that the highest click rate is achieved with the first banner impression. In terms of maximum impression of the Net users, the "sweet spot" is located at the third banner impression; after that, it's "banner burnout."
Banner burnout
Who's Marketing Online - "Click Racing"
  • "Banner immunity" is creeping into the mix - Customers under 30 and college educated are saying "no" to banner advertising techniques (iflowers).
  • If banner ads are not integrated into the site, they stick out like "sore digital."
Banner message
Advertising Age - "Banners that move make big impression"
  • Billboard banner ads are not enough - direct marketing and interactivity must play a role. The more interactivity created by the banners, the higher the click-through rates and the deeper the involvement consumers will have with the brand.
  • Most browsers need Shockwave and other technologies before they will read any of the more sophisticated banners on the Web. For that reason, some executives bet that forms embedded "within banners" will be the winners in 1997.
  • The idea is to put the power of the site in the hands of the users.
  • Forms make the banner more useful to the consumer. Show the users the utility of the site directly from the banner. (form-embedded banners)
  • There is some disagreement regarding the function of banner advertising. Some say the banner's primary function is to build brand awareness, and the web is a specialty one-to-one marketing tool. Others are more concerned with volume and click through.
Function of banner advertising
Hot Wired
Advertising Effectiveness Study
  • The impact of a single web banner exposure on the Consumer Loyalty ranged from a 5% increase to over 50%, whether or not the viewer actually clicked on the banner.
  • The high-involvement nature of the Web and the prominent placement aspects of the advertising seem to play a larger role in defining the effectiveness than did the particular creative tested in the study.
  • As frequency of exposure increases, there are both incremental benefits and diminishing marginal returns.
  • The primary drivers for click-through seem to be the nature of the audience. The inherent interest of the product category, or brand, to the audience appears to be the most salient factor driving click-through. The appeal of the creative may also play a role, but the role seems to be secondary in nature.
  • Click-through rate did not predict the brand building impact of the ad banner exposure.
  • A single additional ad banner can have a measurable impact even after several previous ads have been viewed.
  • Click-through rate -- which appears to be partly dependent on a personal propensity to click on ad banners and partly on perceived immediate personal relevance of the product category -- was not necessarily found to be predictive of the overall brand-building impact of the ad banner.
  • Web advertising actually outperforms television advertising in its ability to build brand awareness that favorably influences purchasing behavior.
Advertising effectiveness: click-through drivers, impact and customer loyalty
Advertising Age, "Smart Ads Leave the Concept of Linking Behind" (2/24/97)
First virtual has launched a product that embeds forms within banners allowing the user to perform a transaction without leaving the site they are at. The catch is that they need an account with first virtual. Interactivity
Kansas City Business Journal, "H&R Block gets hip in Cyberspace" (3/14/97) "Banner advertising has fallen out of favor with some Web marketers who say it is expensive and ineffective. A new trend, they say, uses the interactive nature of their Web sites to create ongoing relationships with potential customers on the Internet." This has led to "Relationship Marketing" becoming a new buzzword in Internet promotion. Interactivity
Business Wire, "Lycos Pioneers First Phase of Web Advertising Standards" (3/10/97) Lycos announced that it "will lead the first phase in the drive to standardize the size of banner advertisements on the Web". Lycos will adopt the standard and hopes to be a role model for other sites on the web. Size of Banner Ads
PR Newswire, " Surpasses Industry Average; Announcing Their Highest Advertising Results on Yahoo!" (2/28/97)
  • The average click through rate from banner advertising on the Internet is 2.1%.
  • "We believe's success in surpassing ad industry standards will grow as we continue to insist on carefully selected words, provide targeted banner ad design and frequently rotate the ads, said Ian Sutcliffe, President of
Improving Click- Through

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Comments are welcome

Created: Apr. 21, 1997
Revised: Apr. 13, 1998