Who clicks on banner ads?

Hands up: who clicks through on banner ads and popups? That many of you, really? Interesting…

You may be surprised to learn that banner ad click through rates are very low. That could be a bad thing from the point of view of web users as much of the content on the web is paid for through advertising. As the web matures and particularly during an economic downturn, there is growing pressure from shareholders for content providers to start charging for their wares and at least offering a premium model.

The fundamental problem is that banner ads and popups don’t seem to be paying their way and are, to a huge proportion of web users, nothing more than an annoyance. To the savvy user with the right browser and appropriate plugins (AdBlockPlus and NoScript on Firefox), the annoyance becomes invisible as the software flicks away the popups and de-renders the banners.

Marketing expert Matthew Bunker of the University of Northern Iowa, USA, working with doctoral student Darrell Bartholomew of the Spears School of Business in Stillwater, Oklahoma, point out that researchers have barely touched on the question: why are banner ad click-through rates so extremely low?

One of the main issues that needs to be addressed if advertising is to provide a sustainable business model for countless websites is that users simply don’t trust popups and banners. So often, the computer security industry and its pundits warn against clicking such entities for fear of contracting a virus, spyware or becoming the victim of scams and spams. Moreover negative word-of-mouth means that many, many users regard ads with suspicion and yet they are only too happy to visit a shortened URL via a social networking site such as Twitter or Facebook only to be presented with some video clip or “amusing” graphic created by marketing campaigners hoping to make their product go viral.

In the heady days of 2007, before the credit crunch and just as web 2.0 went mainstream, internet advertising revenues almost peaked at $10 billion for the first six months of that year. Static banner ads accounted for about a fifth of that revenue while rich media, ads with animation, sound or interactivity accounted for about 7% of the revenue. Hearsay and anecdotal evidence suggests that those figures are not being repeated in today’s market. However, even at the revenue peak, click-through rates had fallen from 7% in the period 1996-2002 (which spans the web 1.0 dot.com bubble) to a tenth that rate at 0.7%

Marketeers, ad account managers, and brand management agencies will always tell you that there’s more to a campaign than a click-through rate but brand awareness is simply not as important as bodies on seats, when we’re talking about the bottom line.

Bunker and Bartholemew explain that other research has shown click-through rate literature to be determined by users need to maintain social relationships, to relax and pass the time, to satisfy their curiosity, and to show an interest in the product. Now, I don’t know about you, but I’ve never seen a banner ad as a way to maintain social contacts, isn’t that what the phone, the pub, instant messaging, SMS, and Facebook, even, are for? Moreover, I’ve never, in an idle moment felt the urge to click on an animation advertising some obscure product and certainly not to relax…

In the early years of the popular internet, banner ads were a novelty, so perhaps people were clicking through out of curiosity. But, novelty wears off pretty quickly and once the web had reached a critical mass and diversity it seems that there would always be yet another site to visit that didn’t require a curious click on an ad. It’s different, of course, if you’re shopping online, you are then far more likely to be inclined to click an ad if it’s for something you’re planning to buy.

One bad experience early on in one’s net surfing career, however, will turn the vast majority of users off from clicking any ads. This is especially true if they start receiving spam and other unsolicited communications or if that innocent popup delivered an unwanted malicious payload, such as a spyware program, or ingratiated itself on their browser favorites or bookmarks.

“Distrust appears to be a strong antecedent for active avoidance behaviour. This is especially true in the internet environment where uncertainty remains high for most consumers,” say Bunker and Bartholemew.

They point out that trust seems to be the key to sustaining a relevant, non-negligible click-through rate with users of trusted sites more keen to click through banner ads. Of course, in the days after the New York Times website was duped into running an ad carrying Trojan code, even that notion may have changed for yet another portion of the net populace.

“Mistrust is an important variable to investigate in the internet environment due to the vulnerability that occurs with each click of the mouse,” the researchers conclude. If content providers are to be sustained by advertising, they had better become more vigilant in controlling the advertising associated with their brands not only on their own sites but on the sites on which others advertise. Only then will users do the sensible thing, click through the ads, and help keep content free.

Of course, if you’re using NoScript, AdBlockPlus and SkipScreen it’s probably been quite a while since you saw an ad at all…then again, apparently no more than 8% of Americans know what a browser is and certainly see no distinction between a browser and Google, according to a recent strawpoll…

Matthew P. Bunker, & Darrell E. Bartholomew (2009). A multidimensional framework of web browsers’ trust and distrust of banner advertisements. Int. J. Business Information Systems, 5 (1), 19-33