Is there still life in the banner ad?

I’ve been thinking over Google’s acquisition of DoubleClick and what the implications are for the interactive advertising business. I’ve known DoubleClick since the mid90s, when they acquired’s first ad server provider — NetGravity — and even have used Dart, it’s primary product when I was learning online ad ops at IDG a couple years back. It sucked.

Ad servers are neither interesting nor fun to play with. Those who do play with them usually hate them, and trade tales of their quirks and bad behaviors like grizzled veterans of the war. Which is why ad ops is the most thankless job in the interactive world, yet the one with the highest stakes. Screw up an ad campaign — on the publishing side — and you can kiss the advertiser goodbye. Mis-traffic a campaign (we’re talking agency side now) — frontload the impressions, forget to daypart — and you’re going to have an irate client (if the client is paying attention, which I doubt many have).

So Google — who cracked open the concept pioneered by Bill Gross of placing ads against search results, is for all intents and purposes now the master of ad serving and targeting. Yahoo has Panama, and MSN is getting it together, and lots of nimble little mammal vendors like Quigo are providing paid search capabilities to publishers who don’t want Google to say “all your base belong to us,” but game over, when it comes to ad serving networks, Google is, as my colleague Gary Milner said in an email over the weekend a “media titan.”

The interesting thing about Google’s acquisition in my mind is not the competitive play of keeping a tired product like DoubleClick out of the competition’s hands. DoubleClick has been a creature of its private equity parent for the past few years, and there wasn’t any doubt that someone, someday would cough up the cash to take it over. So now that Google has it, what chance do DoubleClick’s competitors have? I like Atlas — Acquantive’s ad server — it is more precise than DoubleClick and tortured us at in terms of its precision demands when it first came on the scene in the late 90s. Quigo — great company, out of Ziff, with a very aggressive attitude about niche paid search. As the Times noted today — all the ad server alternatives got a nice share price boost thanks to Google putting a value and some attention on their market.

Funny how the unloved sideshow of interactive advertising is suddenly amplifying fears of Google dominance. I’ve seen Google’s pitch and it goes well beyond the search terms that most people associate with them. Video is now playing a stronger role in their pitch — it figures they have to do something to leverage the YouTube buy — and given the better clickthrough rates on rich media, advertisers are going to be drawn to the online 30-second spot (not pre-roll which I don’t like at all). This is great news for agencies that were worried about their TV practice — there is an avalanche of client demand headed their way for short, smart web videos to stick into big IMUs (large rectangle “interactive marketing units” — IDG-jargon)

But the banner — the lowly, punch-the-monkey, lower-my-bills piece of animated gif junk that delivers click-through rates measured in basis points — the modern equivalent of direct mail where a one percent response is considered a massive success. I’ve seen stats for a major project (I won’t name names) where the agency proudly proclaimed they served 45 million impressions on behalf of their client resulting in 62,000 visits.

That sucks. Display or banner advertising basically just contributes to clutter, places an emphasis on inflated page view numbers which no believes because no can agree on how to audit the numbers, and makes no one happy — not the poor junior designers at the agency who have to think of genius in a slot 468 pixels wide by 60 pixels tall — to the traffickers who have to pore through Comscore to find the right demographic to serve them too, to the client who knows the ROI is just going to suck, and the site that hosts the suckers who has to watch their gorgeous site design get nuked by the online equivalent of NASCAR after too many beers.

Ugh. Can you tell I don’t like banners?

Okay, but my mind changed last summer when Milner came out of a metrics review with the weird correlation that when we ran banner ads our search campaigns performed better and when we didn’t run banners our search yields declined. Hmm. Then our agency told us the same thing — run banners with search and both get an uplift. Okay. Lesson learned — reserve some component of every campaign to run in parallel with search. Not exactly rocket science, nor cause to proclaim the renaissance of display ads. But …

Search is pretty saturated. Get into a bid war over a non-brand term like “digital camera” and the cost per click gets ugly fast. It’s also dangerous to get into a “search death spiral” where you see search outperform other tactics so you starve them and allocate more to search but meanwhile that elusive thing called “Awareness” declines and the pipeline dries up.

Banners are not to brand what search is to direct marketing. Readers of this blog know I believe brand is driven by customer satisfaction and perception — not the palette and font and animated image in a blinking web ad.

What Google just did — in their infinite wisdom and good M&A sense — is insure a renaissance in banners. The space is distressed. Targeting impressions with behavioral tactics like Tacoda is still pretty sloppy, but interactive marketers are getting very left-brained and sticking the protoscope up the rear end of their campaigns and making every dollar they put in market bark fight for survival. This takes the poor publishers right out of the picture — they’re helpless. The ad is going to perform if the offer is right, the targeting is going to work if the ad server does its job, and the marketer’s site metrics is going to present the naked lunch of whether the campaign performed or not. Those that perform get renewed, refreshed and continued to optimize. Those that don’t move on — fast.

Google obviously is looking at their own analytics and saw potential for a banner revival. By taking the industry standard tool they lock the interactive agencies and media buyers deeper into their clutches, and by waving rich media opportunities like video at marketers, they offer an integrated network that is easy to buy, easy to measure, and easy to manage.

Don’t count Yahoo out yet. Disappointing earnings are not a measure of future potential, only past performance, and Yahoo has a very, very compelling brand awareness story to tell to marketers. While compared to Google like salt to pepper, Yahoo is an entirely different animal — a true content and service network. Google is search and applications. Yahoo is search and content and applications. Sure, Braun wasn’t able to turn it into an interactive tv network, but the notion of a global buy on a network with monster pageviews and great insights into their audience — makes a rich media buy combined with search and banner attractive to a marketer seeking share of voice.

But … Google is everywhere now. There’s the utility side of the business — the one the public sees and uses and depends on. But then there is the advertising business — the one that sells space and sells it from radio to print, AdSense to DoubleClick. Their achilles heel is Asia. I’ll get into the China/Japan thing in another post, I’ve bloviated to long here, killing time in a massively delayed flight to RTP.

Author: David Churbuck

Cape Codder with an itch to write

0 thoughts on “Is there still life in the banner ad?”

  1. RSS ads — two flavors to consider
    1. ads embedded in the feed. Sort of like the stuff InfoWorld started doing at IDG under Matt McAllister. I have no opinion as I have not seen any performance results — e.g. CTR/CPM
    2. using RSS to make a static ad dynamic — lots and lots of potential

  2. Great post. I think there is long way to go before the banner ad is replaced with full on rich media.

    Attention spans are short lived on the web, and a quick, catchy banner can prove much more successful than a 2 minute video stream.

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