In the world of online advertising, banner ads have been a staple for years, promising businesses increased brand awareness and boosted sales. However, nowadays many consider them outdated and claim that their performance leaves a lot to be desired.

With the digital advertising space being so volatile and prone to sudden changes, it’s no wonder some formats become obsolete. However, exploring why banner ads are not so effective anymore can help you discover the true nature of these paradigm shifts, consequently leading you to alternative solutions capable of providing much better results.

Let’s explore the reasons behind the banner advertisement decline and discuss strategies that will help you improve your campaigns’ performance and make the most of your advertising budget.

A Brief History of Online Banner Ads

Although banner ads need no introduction, not everyone is aware of their surprisingly long and vivid history.

A banner ad, known also as display advertising or a web banner ad, is a form of online advertisement displayed on a publisher’s website. Banner ads are either square or rectangular, and they come in a variety of different dimensions and sizes, depending on their location on the website. For example, leaderboard ads are very wide and short, as they are placed above or below the fold, while skyscraper ads are long and narrow, as they are placed on either the left or right side of the site.

Banner ads were the very first form of internet-specific advertisements, and their history goes way back.

• 1994 brought the idea of selling ad space on a website, similar to how it’s done in a print magazine, and was the year when the very first banner ad appeared. The pioneers in this regard were the digital publication HotWired and Time Warner’s Pathfinder.
• In 1995 an ad agency WebConnect started helping their clients place their ads on websites visited by their target audience and even noticed the growing issue of banner fatigue, introducing a tool capping the maximum number of times a customer would see an ad.
• 1996 brought the emerging online ads industry improvements in tracking capabilities.
• In 1999, the first pay-for-placement search engine services were introduced.
• By 2006. The Internet has become oversaturated with banner ads. It was the year Facebook started to display small banner ads, being very insistent on targeting users with contextual, relevant content instead of a large volume of random advertisements.
• By 2010 the negative perception of banner ads solidified and native ad formats started getting traction.
• In 2023, native ads get 53% more views than banner ads, with banner blindness affecting 86% of consumers. Furthermore, the average CTR for display ads is only 0.05% nowadays!

The Decline of Banner Ad Effectiveness

Once the shining star of online advertising, banner ads have experienced a steady decline in effectiveness over the last few years. Low click-through rates (CTR), ad blockers, and trust issues have made it harder for businesses to achieve their desired results using banner ads. So, what exactly has led to this downturn in banner ads performance?

Low Click-Through Rates (CTR)

One of the primary factors contributing to the decline of banner ads’ effectiveness is the low click-through rates (CTR). This can be attributed to banner blindness, ad saturation, and inadequate targeting. With the ever-increasing number of ads vying for users’ attention, it’s no surprise that many internet users have developed a tendency to ignore banner ads entirely.

Low CTRs lead to reduced conversions, making it difficult for businesses to achieve their advertising goals. To combat this issue, advertisers need to be more strategic in their approach, focusing on better targeting and creating ads that genuinely resonate with their audience.

Rise of Ad Blockers

Ad blockers have become increasingly popular among internet users, causing significant revenue losses for website owners and publishers. In the US alone, it’s estimated that around 27% of internet users block ads, including banner ads, and over 42% of web users worldwide use ad blockers at least once a month. In the UK, their usage has grown by a staggering 82% over the past year, making it even more challenging to create a good banner ad.

The widespread adoption of ad blockers has forced the online advertising industry to rethink its strategies and find new ways to reach audiences.

Trust Issues

Trust issues are another factor contributing to the decline of banner ad efficacy. Intrusive ads can lead to high bounce rates and a negative perception of the brand, consequently encouraging users to install an ad blocker. Banner ads that are perceived as disruptive can cause users to quickly navigate away from the website, further reducing the chances of conversion.

The impact of trust issues on brand perception cannot be underestimated. Exposure to intrusive banner ads can lead to an adverse association with the brand, which may harm the company’s reputation and deter potential customers from engaging with the business in the future. To avoid this pitfall, it’s crucial for advertisers to create ads that are both engaging and respectful of the user’s experience.

Why Banner Ads Are Not Effective Anymore?

Although it would be easiest to pinpoint ad blocking as the core reason for display advertising’s pitfall, it’s not necessarily true.

What’s the most important factor is that banner ads no longer appeal to consumers, who throughout the years grew to expect more from the content they interact with online. 68% of consumers are much more receptive to ads if they appear in context, while brands notice an 18% increase in purchase intent for campaigns that use non-intrusive formats.

The harsh truth is that many consumers consider banner advertising to be “bad ads” and associate them with brands and offers that are not prestigious or even potentially fraudulent. Years of receiving sketchy messaging, clearly meant for the wrong audience, reading low-quality ad copy, and looking at objectively ugly banners led to widespread distrust that cannot be salvaged.

In order to reach modern consumers brands and businesses have to update their affiliate marketing strategy, letting go of the formats that not only no longer work, but can even actively harm their reputation and conversion rates.

Alternatives to Banner Ads

As the effectiveness of banner ads continues to decline, it’s worth considering alternative advertising strategies that may yield better results.

Each of these alternatives offers unique advantages that can help improve the performance of your advertising efforts. Let’s take a closer look at each option and discuss how they can potentially replace your existing banner advertising strategy.

Commerce Media

Arguably, the most revolutionary trend in performance marketing lately, Commerce Media is quickly dominating the advertising sphere.

Commerce Media is an ecosystem of contextual, full-funnel solutions that turn organic media interactions into shoppable moments. Given how chaotic and fragmented the customer journey is nowadays, Commerce Media allows brands to keep their message consistent, and their digital ads non-invasive.

Commerce Media:

• Blends with the content on a page, providing a less intrusive experience for users
• Appears in places consumers approach organically
• Ensures smooth customer experience
• Doesn’t require third-party cookies
• Doesn’t cause trust issues, making your ads appear selectively in brand-safe contexts
• Gets displayed selectively to high-intent consumers
• Is currently the most effective tool for gaining incremental revenue

What’s important, banner ads do not fall into the full-funnel Commerce Media landscape. You won’t find them among the many formats it utilizes, as they do not meet the requirement of being unobtrusive, brand-safe, and contextual.

Content Marketing

Content marketing, a subset of digital marketing, is another alternative to banner advertising that focuses on providing valuable and relevant information to educate your audience, rather than pushing sales. By offering valuable content, you can establish trust and reinforce brand loyalty, increasing the likelihood of future purchases.

Content marketing often takes the form of:

• Infographics
• Videos
• Podcasts
• Web pages

These are all great methods to inform audiences about a business or service. A successful content marketing campaign not only helps to build brand awareness but also fosters deeper connections with your audience and encourages long-term loyalty.

Influencer Marketing

Influencer marketing is a form of marketing that leverages the power of social media personalities to promote products and services, reaching a highly engaged audience. With the rise of social media platforms and the increasing popularity of influencers, this marketing strategy has become an effective way for businesses to reach their target audience.

Influencer marketing offers numerous advantages, such as heightened engagement, an improved user experience, and more accurate targeting. By collaborating with influencers who resonate with your target audience, you can create authentic, engaging content that captures attention and drives sales.

While finding the right influencers to work with can be challenging, the potential rewards make it an attractive alternative to traditional formats.

Banner Ads From The Publisher’s Perspective

It’s essential to mention that it’s not only consumers who no longer want to engage with banner ads. Website owners also grew tired of them and are increasingly avoidant of advertisers who use that particular format in their campaigns. Given that sites that are swarming with banner ads are currently considered untrustworthy, it’s no wonder publishers want to display less and less of them.

First and foremost, other forms of advertising simply earn them more money. Targeting the right audience ensures that ads have much better conversion rates, and website owners gain the most when ads generate leads, not just attract viewers. Furthermore, display ads can include questionable ad copy or visuals, and such banners can decrease the credibility and UX of websites. Finally, users can get wary of a site full of annoying banners even if their content does not arouse suspicion – all it takes is slowing down their browser.

This is why publishers prefer to focus on formats that do not affect their site negatively, favoring brands and marketers that can ensure that their ad will blend seamlessly with the website, both when it comes to design and message. Native ad formats can, for example, resemble an article or promote a product organically mentioned on the site. Such an approach, where the customers are the main focus, works inherently better than a simple spam of banner ads.

Conclusion

The decline in banner ad effectiveness can be attributed to various factors, and it’s time to admit that they are no longer the cornerstone of affiliate marketing. Between the web getting oversaturated with banners and the rise of much more effective formats, brands and companies who want to stay afloat choose to seek incremental sources of revenue elsewhere.

Both influencer and content marketing remain effective money-making strategies if used correctly, but it’s clear that the biggest trend right now is commerce media. The key is to stay adaptable, innovative, and focused on delivering value to your audience.

Gabriela Cendrzak