The Latest Ad Click Count

MARCH 11, 2009

Do your click-throughs measure up?

It may not be what you want to hear, but over the course of the year click-through rates vary.

According to a study of more than 10 billion banner inquiries across Europe from ADTECH (not to be confused with ad:tech), the average click-through rate fluctuates between 0.11% and 0.19%. Apparently, users click on display ads more frequently toward the end of the year, during the major online shopping period. The rate then restabilizes in January at 0.12%.

Since 2004, the average click-through rate has fallen, however, from around 0.3%.

In 2006, ABI Research reported that the average click-through rate for an online banner ad was 0.2%, indicating that the decline has been steady.

An average, though, is only an average.

Across Europe click-through rates vary significantly. Users in France are at the high end with an average click rate of 0.18%, and UK users are at 0.13%. At 0.10%, the German click rate is in the middle of the European range. Scandinavian Web users are more “click cautious,” with average rates of 0.04% for Sweden, 0.05% for Finland and 0.06% for Norway.

ADTECH found that the size of the ad also affects the click rate. Not surprisingly, bigger is better.

A glance up at the chart reveals that the majority of clicks in the display field go to pop-ups, layers and the half-size format (234x60), with an average of 0.5% each. Video ads performed even better at an average 1.7% click rate.

Obviously, video ads greatly increase click-through rates, but compared with banner ads they are more expensive to both place and produce, and as their novelty wears off their rates may decline, too.

Ad Network Prices Take a Hit

JANUARY 22, 2009

But past performance is not necessarily indicative of future results.

Ad network CPMs were down in Q4 2008 compared with Q4 2007, according to PubMatic. Prices for ads on Websites of all sizes had decreased; small, medium and large sites’ ad prices dropped 52%, 23% and 54%, respectively, from the previous year.

PubMatic reported pricing data for text and banner ads sold through advertising networks only. The data reflects publisher revenues, not total ad spending—it includes only advertiser spending on ad networks.

“Online ad pricing is a reflection of what is happening in the overall economy, and as a result, pricing has dropped significantly in almost all categories in the past year,” said Rajeev Goel, CEO of PubMatic, in a statement.

“However, with overall advertising budgets shrinking, the need for marketers to have more accountable advertising could bring more advertising dollars online in 2009 and start an upward trend as some vertical categories have already experienced,” Mr. Goel added.

Price drops leveled from Q3 2008 to Q4 2008. The company said that could have been because increased advertising during the holidays kept ad rates stable.

“These spending figures are best viewed in light of PubMatic’s sample bias,” said David Hallerman, eMarketer’s online advertising analyst. “As the company says, the data excludes inventory sold directly by publishers to ad agencies or advertisers.

“That exclusion is most apparent in the far higher CPMs for small versus large Websites, 61 cents versus 17 cents in Q4. That disparity seems counterintuitive. Shouldn’t sites with more traffic get higher CPMs? However, this research counts mainly inexpensive remnant inventory for large sites, while counting nearly all inventory for small sites.

“In fact, the direct sales of display ads by medium and large sites, along with performance-based deals—which exclude CPM pricing—means this research is only one snapshot of the current display ad market, and not the final picture,” Mr. Hallerman concluded.

The drops in ad network CPMs do not necessarily foretell a drop in total online display ad spending. eMarketer estimates that such spending will actually grow in 2009 by 6.6%.

If advertisers spend more on cheaper ads, that’s still a net increase. For those who buy ads on networks, that may mean getting more for their money. For publishers, it may mean working harder for it.

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Study: Banner Ads Trigger Warm, Fuzzy Feelings
If you flash them, they will come
A recent study in the forthcoming issue of the Journal of Consumer Research posits that banner ads leave a mental imprint, even when users aren't paying attention, Science Daily reports.
The majority of ad exposure occurs when the audience's attention is diverted - flipping through a magazine, waiting for a television show or loading a website. However, given repeated exposure, brief and subconscious ad encounters may endear certain brands to consumer perspectives. This is because repetition leads to familiarity, which in turn yields positive feelings, researchers found.
In addition to more positive associations with brands to which they were frequently exposed, participants also exhibited high levels of tolerance for banner ads in their general periphery, even if their focus was elsewhere. Notably, even 20 exposures did not trigger wear-out effects in the viewers.
The study, entitled "An Examination of Different Explanations for the Mere Exposure Effect," appears in the June edition of the Journal of Consumer Research. Its breadth revisits and reinterprets theories of exposure advertising, particularly those related to Web-based banner ads.