Display Advertising Is Broken Says Agency CEO

 In Content Marketing

22% of UK adults now use ad blockers online, according to the latest figures released by IAB/YouGov. A ComScore study found that 10% of US consumers are already using ad blocking. Worldwide, there are approximately 200 million monthly active users of ad blockers.

Consumers are going out of their way to avoid the content they do not want or need. In an increasingly ad-free world, brands who continue to push for display advertising that interrupts the content experience, and believing that this will work on consumers, will want to rethink their marketing strategy. This according to a media agency CEO who has worked in the digital ad industry for more than a decade, on both the client and agency side.

Display Banner Was Never Alive

All the hype about “display banner is dead” bugs the media agency CEO, who believes display advertising has never really been alive. The industry itself has perpetuated the belief that display advertising works, since so many jobs and tech players depend on it, and so many businesses are looking to sell or be acquired because of it.

The media agency CEO has never seen any evidence where banner ads have worked for clients, bought programmatically or not on ad exchanges and networks. It’s hard to believe that a $5.6 billion industry has perhaps never contributed to an actual sale – an industry consumers wouldn’t miss at all if it disappeared – and yet is still worth so much today.

“We’ve Tried To Sex Up Something That Was Fundamentally Broken”

If consumers don’t respond or engage with display ads, what’s the point of doing it? The media agency CEO argues that the industry is making something fundamentally broken more sophisticated than it looks. And it is convincing marketers that they need to get on the display advertising bandwagon if they consider themselves to be sophisticated marketers. When in reality, the opposite is true. If marketers don’t understand what it is they are buying, they shouldn’t buy it in the first place.

Many marketers see display advertising as a key component to the success of their marketing strategy because of its high reach. But the bottom line is, in the media agency CEO’s words, the industry “fudges” the metrics to make display advertising look like it has a high ROI.

Pepsi exec Brad Jakeman has made a similar argument at the Association of National Advertisers conference last year. He feels that advertising is based on a broken model of creating “polluting” content that consumers don’t want, and advertisers and marketers know it. But they continue to do it because most marketing organizations are still using outdated measurement systems to evaluate marketing performance, and these vanity metrics show that content like banner ads works.

The media agency CEO had tried explaining this to clients. And surprisingly many of them agree that there is no evidence proving display advertising actually works, and yet they still spend money on it because it is one of the few options available when it comes to running digital campaigns.

Smart Money Will Go To Customer-Focused Content

When asked where marketers should be spending their money on instead of display advertising, the media agency CEO suggests that we need to focus on fewer, more effective formats like digital video.

Two years ago I suggested that marketers should stop doing banner ads and shift their investments to content marketing instead. Back in 2013, click through rates for banner ads were less than 0.1% for most industries, so can you imagine what the stats look like now with so many free ad blockers readily available for use?

Smart marketers will focus their resources on creating relevant, valuable content that their target consumers actually want and need, instead of interrupting their content experiences. Whether it’s written or video content, providing real value is how you can reach, engage and convert consumers.

What do you think? Is display advertising still a part of your marketing strategy? Why or why not?

Are you interested in engaging and converting new customer for your business? Contact me here and let’s talk about how we can help.  Follow me on LinkedInTwitterFacebook and Subscribe here for regular updates.

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Michael Brenner
Michael Brenner is the CEO of Marketing Insider Group, former Head of Strategy at NewsCred, and the former VP of Global Content Marketing at SAP. Michael is also the co-author of The Content Formula, a contributor to leading publications like The Economist, Inc Magazine, The Guardian, and Forbes and a frequent speaker at industry events covering topics such as marketing strategy, social business, content marketing, digital marketing, social media and personal branding.  Follow Michael on Twitter (@BrennerMichael)LinkedInFacebook and Google+ and Subscribe to the Marketing Insider.
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Showing 4 comments
  • Mark Lennon

    I must admit, I’ve never been a huge fan of display advertising. I’m wondering, however, if you see a role for using segmented, targeted display ads as part of the mix of ways to offer content? Does it play a role in an account-based marketing strategy? How about if the display ad is offering an e-book, white paper, or other content (rather than brand awareness advertisements?

    • Michael Brenner

      Hi Mark,

      I do see display as playing a role as long as the “offer” is tested content that has already resonated (social cues) and with targeting / re-targeting. I think “free” content works better than gated but both have a role to play for different objectives (awareness, engagement vs leads). I have helped a couple of clients set this up and it can work depending on the content, the cookie pool and the platform.

  • John D.

    I don’t think display advertising is “dead”, but I do think other forms of advertising are both cheaper and more effective. I’d say only bother with it if you’re already utilizing all the other types of advertising that are available.

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