Digital advertising isn’t new. The first banner ad dates back to 1994 when AT&T placed one on Wired’s website. Soon after those ads appeared, search engines and directories alike cashed in on the ads as did the newspapers that launched their respective websites in the mid-to late-1990s. However, all these years later, some contend that the use of banners was flawed from the beginning.
“The problem with an ad online is that people don’t come to the New York Times wanting to buy something from Amazon.com,” said Christopher Guess, residential fellow at the Donald W. Reynolds Journalism Institute at the University of Missouri. He is also the creator of Push, an open-source mobile news app.
The issue back then was that ads often took users to a different website, and that was vastly different from how ads in print newspapers or even on radio/TV functioned. Ads in the non-digital world also weren’t about promoting rival content or offerings—as many of those early banner ads did.
However, the banner has proven to be versatile even all these years later.
“Banner ads and display advertising generally both evolved into a variety of formats with different kinds of effectiveness,” said Rick Ducey, managing director of BIA Advisory Services.
One of the formats that followed was the dubious “pop-up” ads, which Ducey noted were notorious in their ability to annoy consumers.
“Web browsers offered tools to prevent these pop-up ads, much to consumers’ relief,” he said. “Publishers evolved their pricing for banner ads from offering rates for click-throughs to charge for the value of impressions. For example, a typical banner ad may be seen by 10,000 people but only give a few click-throughs. The value of the other 9,995 impressions of consumers seeing that banner ad is not zero, so publishers offered an impressions-based pricing model as well as the pay-per-click model.”
The times have changed, and today’s digital offerings are vastly different.
“Comparing the digital advertising of 20 years ago to the digital advertising of today is like comparing the Chevette I had as a kid to a Tesla today,” said Seth Rogin, president and CEO of Nucleus Marketing Solutions. “Both are cars, but that’s about where the comparison ends…Today’s digital advertising is powered by deep data-powered insight and is held accountable for performance through clear ROI reporting. These days, nearly every other advertising platform is working to perform at current digital performance standards.”
Beyond Driving Traffic
Digital advertising is much more than just driving traffic, and this can even be about making a meaningful impact with the viewer.
“The goal isn’t always traffic, but rather effectiveness for the advertiser,” said Mat Zucker, partner at Prophet, a brand and marketing consultancy. “This is more than just click-through rate.”
Today’s ads in all formats may look little changed, but these are far more effective as the messages of the ads have become vastly more targeted to the viewers.
“The rise of video, mobile, social and native display ad formats and using data-driven consumer segmentation and tracking cookies to retarget website visitors all became very successful refinements to the original banner ads in terms of effectiveness and consumer acceptance,” said Duecy. “Now targeting has been extended to cross-platform and devices using different kinds of methods to build identity graphs. Advertisers now have the ability to much more precisely identify strategic consumer segments and target them on digital publisher sites with ads that are relevant in context, timing, and purchase journey stage.”
To the viewer/reader however these ads may look little changed at first or even second glance.
“This is happening on the back end,” said Rogin. “It isn’t just the pixels on the screen that is so important in how digital ads are changing. The back end algorithms allow us to deliver better targeted ads to our clients.”
Addressing Fake News and Ads
One area where advertisers may be especially cautious when it comes to digital publishing is the proliferation of “fake news,” something that won’t be easily solved anytime soon.
“These are legitimate concerns, as it is the publisher’s job to address ‘fake news’ as it relates to content, but in some cases—such as Facebook and other social media sites—it is the platform’s job to tackle the problem,” said Brock Berry, founder and CEO of AdCellerant. “And if you are an advertiser, it is your job to avoid being connected to fake news. That is the least responsibility, but it is still a concern. The truth is that we’re running billions of ads across digital platforms so it would be impossible not to run into fake news.”
There is also the issue of what exactly is, or is not technically fake news that advertisers may have to address.
“What some call ‘fake news’ is actually just objectively critical reporting,” Rogin said. “The actual ‘fake news,’ inflammatory content posing as news to drive divisions in our society, has a megaphone in television and digital media in a way that it never has before. It would be easy to say that brands shouldn’t support this kind of content. I’d rather build a business model that outperforms for advertisers so that supporting that misinformation makes as little financial sense for a brand as it does for any citizen to read it.”
AI and Machine Learning
Technology is allowing for the ads to be far more targeted to those with specific interests and also more engaging—sometimes even at the same time.
“It is all about connecting with the audience, because in the end you are essentially selling eyeballs,” said Patrick Bingle, owner and business partner at SPARK Digital Sales Group. “We’re still very successful with banner ads in part because newspapers are reaching more people than ever.”
That reach is however just part of the equation, added Bingle. It is still necessary to engage with the audience and get a reaction. “We offer our clients a bundle so that their ads are part of a Google ad words campaign or a Facebook campaign, and this allows us to reach as many people as possible.”
Here is where buzzwords such as “artificial intelligence” (AI) and “machine learning” are being slung around.
“AI and machine learning are the same thing, but we have to make it clear that these aren’t really magic,” Guess said. “These are statistics, and a lot of people miss this in the conversation. The people utilizing this technology are trying to make it seem like it is magic and that it is special.”
What AI or machine learning can do is to look at those statistics based on past usage models and this can in turn predict how future users might react. This can include the size of the ad, where it is placed on the page and even down to the colors.
But as noted, the not-quite-magic actually happens in the algorithms behind the scenes.
“What computers can do is handle this on the scale of millions of people,” Guess explained. “This then creates a demographic. This can be very good for online retailers and other vendors, but it can also reinforce bias including those on age, race and culture.”
As with anything, data has to be understood for it to have any meaningful impact for publishers and advertisers alike.
“Right now, there are some people who are trying to predict future behavior, but we have to understand that we’re both in a golden age of technology yet in a stone age when it comes to using the data,” Rogin said. “AI will play a lot in the next wave of advertising offers, but what we are doing at the present is still just reading behavior and demographics.”
While the analytics and insights generation from huge data bases can be used to develop strategic consumer segments that can be matched to digital publisher audiences to aid in ad campaigns, AI can be used in other ways to help engage the audience.
“There are many rich possibilities including developments with interactive chat bots that rival humans these days in terms of carrying on ‘conversations’ with users,” Ducey said.”It can also be used for matching and optimizing ad creative executions by a large number of factors to generate literally millions of ad campaigns instead of just a handful, all driven by data, business process and logic rules.”
This is where AI or machine learning will converge with another tech industry buzzword, namely “big data.”Algorithms can take all this information and do in minutes what would take humans months and months to do to make sense out of it.
“In terms of technology, there are a ton of things that are being put in place that will improve the campaigns and make them more effective,” said Berry. “We’re looking at terabytes and terabytes of ad data and we’re starting to determine which targets don’t deliver no matter the industry or campaign objective. It is has everything to do with boiling down an ocean of data.”
Yet, the downside of relying too much on today’s hot buzzword-worthy technology could be that sometimes the buzz proves to be unfulfilled hype. AI is just a new spin on determining past successes from data and statistics.
“To me, we see a new thing every year,” said J. Brian Monihan, vice president of the Pamplin Media Group, owner of the Portland (Ore.) Tribune. “Everything now is about AI, and it makes me wonder how legit this is or is it just one more thing to drive? There is the danger of technology fatigue setting in.”
While AI is about reading big data, there are those who are preaching the argument of thinking smaller or at least more locally while trying to be as targeted to the audience. Instead of a “Super Bowl” moment to reach as many eyeballs as possible, today’s digital advertising can be aimed to be far more precisely focused.
“In the past, we were chasing our tails trying to use Google or Amazon products on our site,” said Deb Fellows, founder of GeoTix, a company that offers consumers the ability to purchase tickets for events in their respective market. “This was really a conflict with our brand, and even when consumers clicked on ads it was taking them away to a large national retailer like Amazon instead of supporting a local business. We saw that was driving a lot of money out of town.”
With GeoTix, the company instead developed an ad portal selling tickets for those specific local events.
“This allows the reader of a news story for a local or regional paper online to support the community in the process,” Fellows said. “We believe the local media is very important like never before, and as advertisers, it is important to think of the audience as more than eyeballs.”
Focusing on local media is also the core business model behind Pamplin Media Group, which launched a program just four years ago to maximize its advertisers’ exposure within a specific company.
“Until we launched this program, we had only sold banner ads with very limited success and not much revenue,” said Monihan. “Our company is built around the small mom and pops, people who have a budget of just $250 to $500 to spend on advertising. If what they’re paying for isn’t working, that is a lot of money to them.”
By targeting locally, the small businesses are connecting directly with local customers, and that has proven to be a win-win for the smaller media outlets and the smaller businesses alike.
“One point is that analytics don’t mean a lot to these advertisers,” Monihan said. “To them, the issue is simple: Did it make the cash register ring?”
Here again is where very specific ad targeting can play a key role.
“National banner ads might have a .01 to .03 percent click through,” said SPARK’s Bingle. “We’ve seen that local ads have a higher click through rate. AI has allowed us to narrow down the targeted audience so this has even more impact.”
New Reality for Ads
One other hot technology that could change the way ads are experienced is augmented reality (AR). This technology, which has been used on the editorial side, has a potential for advertisers as well.
“These types of executions with AR and even VR (virtual reality) are more effectively leveraged for events and big moments, but there is potential for these to be used with ad campaigns,” said AdCellerant’s Berry. “The frequency and consistency will have to be determined but this innovative technology can make ads become more creative and immersive.”
AR/VR could even help bridge some of the gap between media advertising and experiential advertising, according to Ducey.
“Generally, the more engaging, more creative, and the better targeted it is at consumers in different parts of their purchase journey, the more effective the advertising will be,” he said. “AR/VR brings a new set of creative capabilities for enhanced story-telling and engagement. We’ll have to see how consumers adapt to and what the take-up rate will be for AR/VR devices and technologies. This tech requires behavior changes, adoption of new devices, and acceptance of new types of narrative conventions.”
This new technology, just like AI or other applications, won’t change the fundamentals of how ads are presented. After more than 20 years, banners are the still the billboards of the information superhighway.
“I don’t see banner ads going away, they’ll evolve,” said Guess. “Google has made its fortune from it, but we can expect to see these ads improved to be better targeted and more compelling in the years to come.”