Is Online Banner Advertising dying?

Number of users who click on Online Ad banners has reduced by half in last 2 years?
Only 16% of all Internet users clicked on just One Display ad in the whole month.

These revealing statistics come from none other than Comscore, the authority in Internet user behavioral tracking. The presentation – “The Click remains irrelevant: Natural Born Clickers Return” by Gian Fulgoni, Chairman & Co-Founder, Comscore Inc – gives you a grim picture of how online display banner Ad are falling rapidly.

I have to give a word of caution here though – These statistics and numbers are mostly for U.S users. Indian Internet market is yet to mature and these trends may not be completely in sync with what is happening in U.S. However, this data will be very useful for Indian Internet Marketeers, Advertisers and Ad agencies as they have got the benefit of hindsight in U.S Market.

Comparative Numbers of Online Display Ad Clickers Vs Non-Clickers (2007 Vs 2009)

Only 16% users clicked on Display Ads only once in the month of March 2009 compared to 32% in July 2007.

Here are some of the other interesting highlights from the report:

Classification of clickers based on frequency of Display Ad clicks

This particular graph shows that heavy (4 clicks & above in a month) and moderate clickers (2-3 clicks) account for bulk of all clicks. They account for 8% of Internet population and account for nearly 85% of all clicks.

User Demographics

Out of the total Display ad clickers 30% represented people earning $100k or more bracket – they actually represent only 4% of all Internet users.

Users in the age bracket of 45+ were highest with 39% – One of the probable reason being they are not that net savvy and do not really care if it is an ad or content.

Category wise Click Through Rates

This is the most important parameter of all – Click through rate (CTR) – How many were exposed to ad and what percentage of the audience clicked. The CTR is dismal with retail / consumer electronics segment faring the worse with only 7 in 10,000 people (0.07%) actually clicking the Ad after exposed to it !

Summary of the report

• Clickers are an increasingly rare group
  • Only 1/6th of internet users clicking on at least one display ad in March 2009
• Heavy clickers continue to account for a disproportionate amount of advertising clicks
  • 4% of internet users account for 67% of all display ad clicks
• Within 4 key advertiser categories we see consistently that clickers are a small group accounting for a minimal proportion of category site visitors and page views
  • Non-clickers show more consistent category interest than
    clickers

Implications:

Focusing on the click ignores the 84% of internet users who never click and the 90+% of category site visitors who were exposed to ads but did not click

Advertisers need to move away from this metric and start measuring the success of a campaign against its actual objectives (awareness, preference, sales, etc.)

(source:Comscore)

The detailed pdf report is available at Comscore site and you can download it from here