In 1994, the ad unit we now call “website banners” debuted as the next great evolution in advertising. Promising more targeted messaging, limited disruption (compared to television ads), better tracking, and the ability for users to take immediate action, the first display ad had an astounding 44% click-through-rate (CTR).
Unfortunately, that CTR would not be maintained. Today, banner ads earn an average .1% CTR—that’s only 1 in 1,000—and over 50% of clicks on mobile ads are accidental, likely pushing that true CTR number even lower. So, what went so horribly wrong with banner ads?
Despite the early pledge, banner ads have become extremely disruptive as website hosts sacrificed user experience for ad revenue. With popups, hidden “close” buttons, audio that automatically plays, and uncomfortable template arrangements designed to squeeze as much ad space into content as possible, display advertising significantly hurts the overall experience for people on the internet. Of course, advertisers and ad-space sellers will tell you that online advertising is the necessary evil that makes the internet largely free. But, we now know that there are promising banner ad alternatives, such as influencer marketing, that can provide real ROI for marketers, without creating awful web experiences.
How Influencer Marketing Trumps Banner Ads
Based on our own studies, influencer marketing produces 11 times as much ROI as a traditional digital campaign. This ROI is driven by the following factors:
- Influencer Marketing is Less Disruptive
Rather than having unwanted ads muddying up the content that website users are looking for, influencer marketing blends in seamlessly with regular web experiences. There are no pop-ups, no blaring music, and no accidental clicks—just regular posts and videos that look similar to their non-promotional counterparts.
- People Trust Friends and Family
According to Nielsen, the top advertising source in terms of trust is “recommendations from people I know”, with 80-85% of people (depending on region of the world) reporting that they “completely” or “somewhat trust” their friends and family. The least trusted form of advertising? Online banner ads and mobile text ads. Unfortunately, many marketing budgets have yet to catch up to this information, with online advertising budgets growing 16% annually. In our opinion, this has less to do with the effectiveness of online ads and more to do with the dearth of digital alternatives.
- Most People Read Reviews Before Making a Purchase
Given the level of general distrust in brands, it’s not surprising that 61% of consumers read reviews before making a purchase. This is because people are looking to their friends and family to help them make decisions, rather than instinctively trusting brands and their marketing messages. With influencer marketing, brands must first connect with influencers who are satisfied with their products and are comfortable promoting them to their networks, which adds a layer of trust. With banner ads, this is completely absent.
- Ad Blocking is Causing Billions in Ad Revenue Losses
According to a report by PageFair and Adobe, an estimated $21.8 billion in ad revenue was lost in 2015 due to ad blocking as ad blocking software adoption has grown 41% in the past 12 months. Ad blocking software has finally got up to the general disgust consumers have with banner ads, and this spells continuing trouble for brands who have focused their budget on digital advertising.
Given all of these reasons, it’s no surprise that influencer marketing has become the primary alternative to banner ads. If you are looking for a new channel to spend your digital budget, contact us today to learn how our influencer marketing automation software can help your brand.