Sunday, November 24, 2013

An amusing market-sizing exercise: Bringing the impact and influence of online advertising down to earth


So, like all of you in the class, I have been doing my fair share of reading up on metrics and measurement of display advertising in an effort to quantify its true efficacy and impact. We all know that people tend to screen out display ads on sites, tend not to click on adverts that appear around search terms, would rather never see an ad on their mobile and decry the growing trend for intersticial pages appearing between the user’s click and her view of the content, but what are the stats?

Well, the most relevant and amusing market-sizing article I have come across is an “10 Horrifying Stats about display advertising” by Mike Volpe, none other than an expert blogger for HubSpot.

Ever wondered how many banner ads will a typical user will be served a month? Mike quotes comScore and says its 1,700.

Ever wondered who are the people who actually do click on banner ads and thus produce ‘customer acquisition’ or ‘action completion’ users of value? Well, again quoting comScore, Mike says only 8% of internet users account for 85% of clicks.

And if the click-through rate for display ads 0.1%, what does that really mean? Mike likes this question and answers it a pile of different ways…. It means you are more likely to complete NAVY SEAL training or get a full house while paying poker or climb Mount Everest or have twins than you are to click on a display ad!

Despite this reality check, there are some good things about banner ads. They do allow advertisers to position ads in related content and they do help build brand profile and exposure, especially through re-targeting.

So, while all is not lost, perhaps we just need to manage client’s expectations about the likely yield on their spend.

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