While nearly as old as the Web itself, online display – or banner – advertising has fallen out of favor in recent years, particularly among advertisers with limited budgets (and who among us doesn’t have a limited budget?). Low click rates, confusing placement options, and the emergence of “cheaper” online marketing channels, such as social media, have relegated online display advertising to the proverbial back burner.

Nonetheless, a broader strategic look at online display reveals that banner advertising doesn’t always get the credit it deserves, especially when used in conjunction with online search marketing and branding campaigns. Here are a couple of thoughts to consider before you rule anything out:

It’s Not about the Clicks

Unless you have an extremely compelling creative and call to action, which is difficult in our particular industry, banner ads are not going to drive thousands of visitors to your website overnight. A click-through rate (CTR) of 2 percent or better is exceptional, if not nearly unheard of. In general, CTR will be less than one-half percent. On the surface, this leads one to believe a banner ad is a complete waste of money. It’s not – you’re just looking at the wrong metric.

Bottom line: As with any branding initiative, online display advertising is not about direct response. It’s about delivering a large number of brand impressions to the right audience so as to familiarize that audience with your agency name, what it does, and what it’s about.

Online Display Improves Performance Elsewhere

The effects of online display campaigns are latent and rarely measurable or justifiable by way of direct returns. Instead, banner ads can supplement, complement, and boost other online campaigns that focus on direct response, such as organic and paid search.

A useful way to conceptualize the role of online display is to consider the steps in the typical sales funnel: Awareness -> Favorability -> Consideration -> Intent -> Purchase. Online display introduces consumers into the top of the funnel (Awareness and perhaps Favorability), while other marketing channels usher the prospect through the rest of the funnel, from Consideration to Purchase. Rarely does a consumer jump into the funnel midway, and thus banner ads serve as a vital but underrated component in the sales machine.

Seminal research from comScore’s Whither the Click series and reports from Specific Media and iCrossing corroborate the theory that, despite a lack of clicks, online display campaigns can have a positive and significant effect on a number of key performance metrics, including:

  • 14% increase in search engine traffic. (iCrossing)
  • 15% increase in paid search click-throughs. (iCrossing)
  • A 38% to 246%(!) increase in searches for brand terms. (comScore and Specific Media)
  • 27% increase in likelihood of purchasing a product from the advertised brand (comScore)

Bottom line: A well-conceived marketing strategy utilizes multiple, integrated marketing channels that yield far better results when used in concert than when used independently. Combining display advertising with search advertising is no exception.

A very notable omission from these reports, as you may have noticed, is the exact or even approximate levels of spend and reach that facilitated these marked effects. One can assume they were sizeable and somewhat incomparable to the limitations faced by local agencies and their corresponding budgets.

Nonetheless, our own analyses here at Tower Hill suggest that optimal reach is one weekly impression for every two households in our target market (i.e., Florida homeowners who meet our underwriting criteria) before returns tend to diminish. In other words, if there are 60,000 households in your own local target market, you should aim for 30,000 display ad impressions per week. While this may sound like a lot, online impressions come pretty cheap. Your spend would likely be in the neighborhood of $600-1,200/month.

Beyond your budget? No worries. Narrow your target market and make sure your search marketing efforts correspond accordingly. Today’s ad delivery platforms accommodate an amazing level of geographic, demographic, and behavioral targeting that can ensure your ads are reaching the audience you specify. Here’s where your experience, judgment, and good sense come into play.

That being said, your results may vary depending on a number of factors, such as the competitive landscape, product demand, and your own offline marketing efforts. A reputable, experienced media planner or advertising agency can certainly assist you in preliminary planning and post-campaign analyses to establish a suitable long-term strategy for your agency.