The Digital Publishers Dilemma: Monetization with Ads

Since print publications expanded into the digital format in the early nineties, publishers have tried to figure out how to make money off of online ads. Emerging technology offered advertisers a new frontier to conquer, with many hoping to recreate the same kind success found during advertising’s golden age of the sixties and seventies.

Rather, the opposite happened.

Instead of using this technology as inspiration for new ways to interact with users, publishers simply sold display ads and plastered them into every available pixel of white space, interrupting how readers engaged with content online.

Recently, marketers have begun experimenting with more modern ways to monetize with ads, but traditional display solutions continue to be used to this day. Below, I’ll discuss the pros and cons of the most popular models, and highlight some emerging ideas that hope to revolutionize display advertising.

Display and Banner Ads

Traditional display and banner ads appear on most desktop and mobile web pages, in the form of text, images, flash, video and audio. Over the years, brands have snapped up space in digital content, spending money to promote themselves on articles and overview pages with high numbers of pageviews, often regardless of their target audience. Both advertisers and publishers operated under the assumption that by tracking metrics such as impressions and click through rates, they’d be able to accurately predict the impact these ads had on readers.

However, without meaningful context or modernization, display ads have lead to an epidemic of banner blindness. Savvy Internet users are simply desensitized to them. The average clickthrough rate of display ads across all formats and placements is an abysmal 0.06 percent. Half of the viewers surveyed in an Infolinks study never click on ads online, while 35 percent click on less than 5 ads per month. The use of ad blocking software rose 41 percentbetween 2014 and 2015, and 70 percent of mobile users block ads (or plan to) on their smartphones.

And those impressions you did garner on your mobile ads? Roughly half were accidental.

Site Takeovers

The “takeover” of a site homepage (or popular landing page) is an all-encompassing form of display advertising, with one specific brand taking over all available ad units on a page, sometimes including a temporary website “skin” surrounding the content.

This ramped-up advertising offers benefits that single display ads don’t. Firstly, blanketing a page with ads for one product or service, as opposed to displaying multiple different brands, is more impactful. More exposure increases the likelihood that a user will remember the brand or logo after logging off. Secondly, this ad strategy makes it more likely that readers will associate two brands with each other, which—depending on the reputation of a publisher—could be advantageous to advertisers.

Unfortunately, like display and banner ads, the ROI for site takeovers is questionable at best. Advertisers are charged a pretty penny to own 100 percent of ad space on a high-traffic page, with brands like Yahoo and YouTube charging anywhere from $400K to $450K per day. Returns on this investment are low. Some speculate that this is because these high-traffic pages have a wide variety of users, which makes it difficult to successfully target to a specific demographic.

Impact on Consumer Engagement

The lack of substantial modernization in the display ad space hasn’t just affected publishers’ financial bottom lines—it’s also resulted in an erosion of user experience. From the slowing of page load times and annoying auto-play videos to being bombarded by non-contextual advertising, the user experience of ad-heavy pages tends to be mediocre at best. When pages don’t load or aren’t easy on the eyes, users don’t stick around. They simply move on to the next publication.

This effect can be seen in site usability metrics such as bounce rate and time on site, which are widely believed by the analytics community to have a significant impact on how a website is ranked by Google and other search engines. Similarly, an article that’s pleasing to read will be organically shared via social media, which also boosts its SEO.

Numbers aside, these disruptive advertising tactics simply aren’t good for a brand’s image. Readers won’t accept a bad UX because they don’t have to—with so many apps and sites publishing similar content, experience remains the most significant differentiator.

Making Ads Relevant

The most pervasive issue for display advertising continues to be a lack of relevance to users, with 58 percent reporting that the ads they see just don’t apply to them. To fix this issue, marketers have begun using geopositional data, better design and relatable language to appeal to more users.

Situational marketing, which uses geopositional technology to target users based on their physical location and mobile search data, is being used to serve users ads that are relevant and timely. Manish Patel, CEO of digital marketing provider Brandify, explains that since 70 percent of their audience is using mobile to find locations, it makes sense to optimize your business on mobile, and right when it’s being searched. “Have an ad pop up when someone drives by. If a customer is stuck in traffic, send them a message offering a coupon and a new route,” he suggests. Patel continues that businesses must use data in new, intelligent ways in order to remain competitive. “It’s getting the marketing team thinking smarter about the consumer because consumers are smarter.”

Context matters, but so do visuals. If your ad looks like an ad, or uses traditional sales jargon instead of adopting a conversational tone, users will skip right past it. Simple color palettes and straightforward language make a brand more authentic and relatable to consumers.

Despite the recent increase in more attractive, conversational, contextually-relevant ads, it remains unseen as to whether or not banner ads, display ads and site takeovers can overcome the distrust that pervades public perception these traditional models. While some in the industry proclaim that “display is dead,” others are more optimistic, largely due to an uptick in mobile use and the rapid pace at which new tech devices and opportunities are invented.

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