April 22, 2008

New Chart: Display Ads Do Work - and They’re Getting Better

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Online Display Ads Get Best ROI
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For our first Chart of the Week, we chose something from our new 2008 Online Advertising Handbook & Benchmarks. For years, online display advertising has been a confusing challenge for brand builders and the object of suspicion for direct marketing folks.

Online ads suffer because they’re branding units that offer the possibility of a direct click, so they’ve often been judged on the basis of clickthroughs. But, as advertisers and publishers become more sophisticated, the metrics and methods of success are improving.

The nature of targeting is evolving rapidly as real-time logic decides which ad to serve when and the reach of large networks allows for niche audiences to be pulled from the crowd and treated differently.

Advertisers rate the ability to use behavioral and contextual targeting as key drivers of ROI. Major brand studies also cite targeting as the key element of success and show that ads were more effective in 2007 than they were previously. That’s a trend that should continue.

The key takeaway for advertisers is that the context in which an ad is served is at least as important as the ad itself. It’s no different than traditional direct marketing; the list is the most important variable in a successful campaign.

An impression is wasted if the consumer is not in the proper state of mind, or simply does not fall into the group of people who would have reason to consider the offer. From an ROI perspective, eliminating wasted impressions, then making a good impression by serving up great advertising, is consistently the best option for advertisers.

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Executive summary of 2008 Online Advertising Handbook & Benchmarks:

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