Interesting article on the effectiveness of online advertising and click through rates from Business Week
- The truth about online ads is that precious few people actually click on them. And the percentage of people who respond to common "banner ads," the ubiquitous interactive posters that run in fixed places on sites, is shrinking steadily. The so-called click-through rate for those ads on major Web destinations such as Yahoo! (YHOO ), Microsoft (MSFT ), and AOL (TWX ) declined from 0.75% to 0.27% during 2006, according to Eyeblaster, a New York-based online ad serving and monitoring firm. It says that last March the average click rate on standard banner ads across the whole Web was 0.2%. This reflects a surge in new ads and Web pages, fueled by the rise in social networks.
- But as responsiveness declines, ad targeting grows more attractive. Marketers see increases of 30% to 300% in click rates when ads are customized based on criteria such as the location, content of Web pages visited, or information researched on search engines. Kevin Lee, co-founder of search marketing firm Didit, says: "Targeting will come in to rescue all forms of digital advertising."