Do Banner Ads Actually Work?
Do banner ads work? Which banner ads are better? How much should I invest in banner ads? You may have heard that banner ads are good for driving (product/disease) awareness. But do they actually work?
I have been analyzing marketing performance data for 10+ years. I want to help you shift your perspective on banner ads. There is a right way and a wrong way to think about them, and the difference usually comes down to your data.
1. First the basics: What are banners ads and what types of banners ads exist in advertising?
Banner ads, also known as display ads, are a form of a digital advertising usually in a rectangular or square graphic displayed on a third-party website to drive traffic to an advertiser’s website. There are different types of banners:
Leaderboard—usually appears at the top of the website and costs premium as it is positioned to catch user’s attention most effectively (top image)
Skyscraper — usually a tall and narrow vertical rectangle (thus the name) displayed on the left or on the right side of a webpage.
Pop-up banners –usually appear (or literally pop up on your screen as you open a webpage or pop-up open a new window) -yes, the annoying ones (right hand side image)
Responsive banners-- they respond or adjust automatically to the size of the device on which you are viewing the website
Mobile Banners –designed for a mobile display
There are different banner formats:
Static banners (usually in a form of a visual (jpeg format)
Animated (GIF or HTML files)
Video banners (usually contain a video in an mp4 format)
Interactive Banners -- provide additional engagement feature for the user, such as a quiz, puzzle, a game etc.
2. What’s the purpose of a banner ad? Why do you purchase banners?
Usually, the purpose of an ad is to drive awareness, engagement or conversions. In MedTech, banner ads are most commonly associated—not limited to-- with driving awareness of product launch, disease state or new clinical data. Banner ads can be used to drive engagement (thanks to the various interactive formats that are now available) or drive conversions (usually for a specific event, but rarely used). These do require a more creative approach to the ad and using interactive formats. For the purpose of this article, we will focus on using banners ads to drive awareness.
3. How do you measure effectiveness of a banner ad?
In marketing, one measures everything through KPIs, also known as Key Performance Indicators — metrics designed to evaluate ad performance. To measure ad’s effectiveness, you need to know the ad’s purpose.
In this example, we are looking at using banners to drive awareness (purpose: driving awareness).
How can you measure awareness of your ad? What metrics do you need to look at?
Impressions: impressions allow you to assess your ad’s exposure, i.e. how often your ad is seen (or how many times the website has shown your ad to its users) but it doesn’t indicate if the audience interacted with your ad
Click-Through Rate (CTR %): this metric shows the interaction level, i.e. how many times users clicked on the ad
Cost Per Mille (CPM): how much does it cost you to purchase 1,000 impressions (from French “mille” meaning “one thousand”). CPM is derived by dividing the total cost by the total impressions
Awareness vs Reach
Awareness is frequently mixed up with reach, i.e. marketers look at the number of impressions a banner ad receives and assume that’s the awareness numbers. Impressions indicate the number of eyes the website has shown or displayed the ad too; it doesn’t mean the users actively seen and read the ad. A user can scroll pass the ad on the website, but the website will count as a served impression. However, impressions do matter because they allow you to gauge the audience size the ad is reaching, although each impression is NOT unique, i.e. meaning it can be served to the same user multiple times.
If using just these three metrics, it seems it will be rather easy to make a conclusion if your banner ad is working or not—which is the biggest assumption most marketers make.
· If your impressions are low, then only a small audience is seeing the ad, and the ad is not working.
· If CTR is low, then no one is clicking on it, and the ad is not working.
· If the CPM is too high, then ad is too expensive, and the ad is not working.
In reality, it is not so simple. This linear logic is often inaccurate, which is exactly why marketers struggle to determine if a banner ad is actually working or if they should stop sinking money into it.
Let’s examine further additional scenarios:
When using banner ads to drive awareness, the goal is to get as many eyes on the ad as possible, to expose it to as many people as possible—to inform your target audience about your great product. Furthermore, decade long research shows that a user needs to see your ad at least 7 times to retain its message. So, your goal is to get a maximum exposure to a maximum number of people over an extended period of time. This means you need to run your ad for at least 6 months –depending on the # of impressions the ad receives—before you can understand the impact.
Stop Obsessing over CTR%
Why is this so hard to justify banner ads investment in MedTech? Because when CTR % is low, it is easy to assume that no one is clicking on the ad, and if no one is clicking, the ad is not performing, therefore digital is not working.
But it is not always about the CTR.
What you don’t see is these three scenarios:
Scenario A:
· a physician who saw the ad online, and then contacted the company’s Sales Rep for additional info;
· a physician who saw the ad multiple times over a period of a few months, finally talked to a rep and ordered a product
There’s no clear attribution of a product purchase to the ad (that helped discover the product). Because MedTech Sales Cycle is long (from weeks to months or years), but you need to show digital impact NOW, and metrics are not in your favor, the banner ads gets cut again. And the cycle repeats.
Scenario B:
What happens when a user does click on the ad? There are additional metrics you can look at:
· # of web sessions –how many times a user visited your website after the click
· Engagement Rate % (percentage of sessions where users actively engage with your webpage ad defined by GA4 analytics)
· Ave Session Duration (how long did a user stay on your website)
This additional information can help you understand the level of your customer interest—those who engage more than average tend to show more interest in the product, be in the middle of the customer marketing funnel, aka in the stage where they are “actively shopping:” researching additional information, comparing to competitors, etc.
Scenario C:
How many conversions the ad received, i.e. high-level actions a user took on your website after clicking on your ad?
· Did they sign up for your newsletter?
· Did you fill out a format with their contact info?
· Did they download a brochure?
Conversions are bridge to revenue in MedTech marketing. Once you capture a lead's contact info, you can sync them into Marketo or Salesforce for automated email nurturing. More importantly, it gives your Sales reps a qualified reason to follow up and close the deal.
Are you struggling to make sense of your metrics? Expert advice is a phone call away. Get in touch today.
Case in Point:
Look at this sample data table showing banner ad performance you receive from two different publishers. Which one perform better at the initital review of the metrics?
Sample data showing banner ad performance between two different publishers
If you were to look only at the key KPIs for pre-click data --Total Impressions, CTR% and CPM -- you are more likely to conclude that Advertiser A is more effective: CTR is higher and CPM is lower than B; even though your total cost is higher, you are getting more impressions and clicks.
How will your decision change if: You were to look at the data on the right side of the table (known as post-click data): Engagement and Conversion?
Users that come from Advertiser B show more interest and are more engaged as seen in Higher Ave Session duration and Higher ER%. There’s a conversion, i.e. a user filled out a form with their contact info. [To fully examine the depth of this conversion, a Sales Rep needs to follow up with this contact to obtain more info].
How will your decision change if: this data reflects only one month performance? What if this data reflects 6 months performance?
Short-term data is unable to show a trend, it reflects performance for just one specific month or 2-3 months considering what’s going on in the environment: seasonality, political landscape, major congresses or new clinical data/research, etc.,. If your ad that runs in December (during the holidays) it may have a very different performance compared to February, but you can’t make a conclusion and make changes to your media plan based on this one month of data. Therefore, it is important to run banner ads for a minimum of 6 months to be able to understand the impact. Ideally, I’d recommend running banner ads for at least a year with a specific vendor to be able to gauge performance trend.
Final Takeaway
Marketing performance data tells a story. You cannot look at numbers in isolation and expect to see a clear, straightforward conclusion. To derive real value, you must look at the big picture—combining your quantitative metrics with qualitative insights.
So, do banner ad actually work? Look at your marketing data. Banner ads play an important part of your overall digital marketing strategy. By choosing different advertisers and reviewing long-term data, you can make a conclusion which advertisers work best for your product and which are not worth the spend.
Do you want to ask additional questions or need help with reviewing your banner ad performance data? We are a phone call away. Get in touch today.