Sunday, June 14, 2009

Contagious on Display Advertising

I was pretty surprised to read this article in Contagious about Display Advertising. Chris Kempt-Salt, MD and founder of Kempt, talks about the future of display advertising and how he sees the market changing.

Chris states that "display advertising online is doomed. Users don’t notice it, click-through rates are poor and I hear that even advertisers are wising up and spends are falling fast."

I understand that Chris is coming from a UK point of view but I don't see there being very much of a difference between the UK and Ireland, and I think he's completely wrong. While he does go on to clarify his position, and says that it's all a case of there being too much advertising online, I still find myself coming back to his statement that clickthrough rates are poor and spends are falling. I would say nothing is further from the truth. On at least 4 of the last 5 advertising campaigns I've worked on, the CTRs have not only exceeded industry standards but have done so by 350% to 500%. I see CTRs going up, I see conversions increasing, and I see spends growing. Display advertising isn't just alive, but it's well and truely kicking.

One thing that I do agree with Chris on is his analysis of display advertising density. Chris takes the example of and how display advertising features on a typical page. On a typical page there could be three different ad positions: banner, skyscraper and an MPU sitting around a 300 to 400 word article. This translates to the following:

  • Above the fold on a 1024x768 screen, the content takes up 195930 pixels while the ad positions take up 143340 pixels
  • That equals 42% of the combined area being used for ads
  • Consider that TV advertising in the UK is restricted to seven minutes of advertising per hour (11%)
  • In the US, television uses 27% of airtime for advertising
Those are crazy stats. 42% is a huge amount of space. However, I don't think that it's correct to compare online display advertising to tv. They're not the same, at all. If instead you consider press advertising, the figures are an awful lot more similar. I just picked up a glossy film magazine and at least 35%/40% of the entire thing is advertising.

So what does it all mean?

My experience is that display advertising is not dead or dying, and as for the amount of space used - I don't have a majot issue at all. The death of online display ads will only come through a lack of creativity and innovation from advertisers. Push boundries, use AR, incorporate games and interactive engagements, or simply create stunning visuals. Advertising is built on innovation and creativity, when they die, advertising will die.


Chris Kempt said...

Hi Christian, thanks for taking the time to read my piece and for your response/critique.

With regard to CTRs it sounds like you’re doing really well and you should be congratulated for that but at the end of the day success or failure is all about perspective. 5 times industry standard is fantastic but it’s still not even close to what you can achieve using a different approach, by using more engaging forms of advertising. For example the games that we produce and distribute typically achieve between 5% and 10% CTR and sometimes more which, if you put typical CTRs on banners at a frankly generous 0.2%, is 2500-5000% of what you might expect from a banner campaign. So... you can perhaps see how I’ve come to my conclusion?

It’s really interesting that you compare digital display to print which is in itself a dying format but at least we genuinely agree on one thing. The online advertising industry must be creative and innovative to survive. But In my opinion, being creative and innovative isn’t the same as using 3 standard banner sizes on every page.

At end of the day it doesn’t really matter who’s right or wrong, it’s just important that we have these conversations and that we work together towards solutions.

Thanks again and I look forward to hearing your further thoughts!?




Christian Hughes said...

Hi Chris,

Thanks very much for coming back on my points. I take what you say about the games you do and I agree - I have worked on a number of campaigns that have utilised in-banner games and have achieved fantastic CTRs. That aside I still think it stands that display advertising is not dying.

I think it's important to not the best use of every online channel you have at your disposal - display advertising would not be my first choice when it comes to a direct-response sales driven campaign. I would always choose CPC and Affiliate based channels. However, when it comes to long term, phased, brand building campaigns, display offers many advantages over other channels and more must be consider then simple CTRs.

I agree the reference to print might seem odd but there are many people, certainly in the Irish market, who are not yet in a place to appreciate some of the more dynamic engagement types that can be driven online. Similarly the majority of Irish sites are extremely restrictive when it comes to Rich Media and the opportunity to run multiple interacting ads, page takeovers etc. just doesn't exist. So for many people all they see is the visual impact/message of your display ad, which is something that you need to seriously consider for every ad you do.

All these points aside the most important thing is conversation and that is what is truely driving digital marketing at the moment. Whether it's Social Media and the drive to engage and create conversation between brands and audiences, or if it's regular meet-ups at Measurement Camp type events, the sharing of information, opinion and experience is what will push all digital marketing activities to improve themselves.

Cheers again Chris - I look forward to talking to you in the future.


Chris Kempt said...

My pleasure, thank you for responding to my response!

I'm sure our paths will cross again, keep up the good work!



Christian Hughes said...

I hope so.