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Two decades hence, banner ads going strong but with challenges ahead

It has been 20 years when the first banner ad on the web by AT&T in the United States went live. With a copy as simple as ‘Have you ever clicked your mouse right here?’, display advertising changed forever. According to IAB, digital advertisements will hit USD 46 billion this year. There have been many evolutions of the banner ads over the years.

While banner ads have been around for a long time, they were considered annoying by large sections of onliners globally.

Despite its two-decade long survival, the change in marketing in a digital world begs the question: are banner ads still relevant? Malcolm Wong, Vice President, Operations APAC, Smaato, feels this old form of internet advertising is still very relevant. He said, “Rich media, native ads are customised display ad units. Not all countries have smartphones which can run on rich media. Therefore banner ads are definitely still relevant. Whether rich media or native ads or display banner ads, they all serve a common purpose of relaying marketing messages to users.”

Banner ads’ relevance comes in the way they are specifically targeted to users in today’s times. With retargeting, the mechanism of banner ads changed as they were made specific to each user according to his/her preferences.  “The introduction and progression of programmatic ad buying has ensured the relevance of banner ads. Now we are at a place where we can buy in real time and target specific audiences to engage with our brands. We have moved from buying pages (old way) to buying people (new way). This movement to uber targeting has kept banner ads alive,” stated Andy Radovic, Regional Director, Digital (APAC), Maxus Global.

Creative use of banner ads is another factor that has kept this component of digital advertising alive. Doug Chavez, Global Head of Marketing Research and Content, Kenshoo, explained, “The evolution of how advertisers can use display banners is a key to why display continues to be relevant. We’ve gone from static images, animated gifs, rich media and using XML feeds to create dynamic and engaging content. And with advertisers layering on search, social and bespoke data, display ads are anything but static.”

Rohit Dadwal, Managing Director, Mobile Marketing Association APAC, reiterated the view of creative banner ads still being relevant. He said, “Despite predictions to the contrary, banner ads continue to be used by advertisers. The reason is simple – they’ve been working. Marketers new to mobile marketing often test the water by using this basic format and find that it brings in results. Banner ads have also evolved over the years, together with the mobile and digital marketing industry. We have seen content change from static images and click-baiting tactics to interactive messages and video. I would compare banner ads to a tool such as SMS-marketing. You would assume that using these is dull, ineffective, and even annoying to consumers, but in the hands of a creative and determined marketer there is a lot that can be done with these tools.”

However, not all feel that banner ads are as relevant today as they were before. Manish Vij, Founder, SVG (Smile Vun Group) argued, “Digital advertising started with banner ads which have continued to transform over a period of time thereby maintaining its relevance however its significance is at an all time low as its share of the wallet starts to compete with other display formats such as native and video with much better response.”

Banner ads vs native advertising
Native advertising is becoming increasingly popular as brands and publishers come together to develop content which follows the natural form and function of the user experience in which it is placed.

It is considered a smarter way of digital advertising. Mr Vij said, “Native advertising will hamper the progress of banner ads as not only is it more relevant from a consumer standpoint but also quite an effective form of advertising in the mobile world.”

However some feel that the two can coexist and complement each other. Mr Chavez said, “Native advertising can take many forms and in some cases it may be better creative use of an existing banner space or content woven into an experience.”

Native advertising can also help banner ads, feels Mr Radovic. He said, “The definition of ‘banner’ has evolved. To some, banner ads are advertorial pieces, contextual ads, in-game mobile ad units, etc. The word banner is much broader now and its use can be very subtle. Of course, you will still see the ‘in-your-face’ banner ads we are all used to, but more will be subtler applications.”

Needs, handsets specification and scales vary with markets. This would help banner ads in countries where smartphones cannot run rich media, feels Mr Wong. He added, “Rich media ads can function on smartphones but not feature phones. There is definitely market for banner ads.”

While native advertising seems less ‘in your face’ than banner ads, but if users are bombarded with too many of native ads, they will start ignoring them too. Mr Dadwal said, “The challenge for marketers is to provide meaningful content and opportunities of engagement that add value to the customer experience.”

Future of banner ads
With the advent of intelligent new techniques, would banner ads be phased out in the next five years?

Mr Radovic feels that the use of video in banners, the interactive rich media aspects of banner ads, the ability to collect data, the socialised aspect, mobile in banners, layering data on top which enables refining of targeting  are all factors that will contribute to the evolution of banner ads in the coming years.

Banner ads will see more evolution as there will be more creative use of the basic display ad format. Mr Wong said, “We will see a lot of animated ads, rich media ads, coming in more engaging forms.”

Mr Chavez feels that the evolution of banner ads follows bigger trends in advertising technology, such as using APIs or XML to pull in data or to create dynamic creative based on a variety of data such as inventory feeds or social relevance. He added, “We will continue to see more open and flexible display ad formats in the next 12 months as advertisers continue to get better at using their data with existing ecosystem functionality.”

However, Mr Vij feels that this format of display advertising won’t survive for long. He said, “I see a world without banner advertising in the next three-five years. The other forms of digital advertising will take over.”

While Mr Vij’s views appear the most apt for the way forward for the business, a poll with Digital Market Asia readers indicated that around 95 per cent of industry stakeholders are still gearing up for a future with banner advertising, even if its efficiency is challenged.

Shubhi Tandon

Shubhi Tandon is the Assistant Editor at Digital Market Asia. Fascinated by the evolving digital media industry, she has focussed on tracking developments in the Asia Pacific market since 2014.