Display advertising leaders AOL and Yahoo are stepping up their banner ad innovation to improve interactivity with consumers and fend off competition from targeted ad solutions from companies such as Facebook. ?
Consumers have long been unwilling to disengage with their chosen content just to click on an ad, to the point that many users ignore the ads that frame a Web page, says Greg Rogers, cofounder and CEO of advertising platform Pictela, which was acquired by AOL last December. “This notion of asking someone to click on an ad to go somewhere else is very hard, and it’s very rare that somebody will click on an ad nowadays,” he says.?
To improve interaction, Pictela developed the IAB Portrait ad unit, which streamlines Web pages from four or five ads to one supersized, feature-filled banner that runs to the right of sought-after content. Because Portrait ads occupy 33% of the page, they’re more noticeable and let brands serve up to three varieties of interactive content to consumers, including video, social network feeds, slideshows and store locators. ?
“We’ve seen engagement go up tremendously,” explains Laura Schooling, director of marketing services at Hearst Digital Media, which signed on as the first third-party publisher to run IAB Portrait ads on its sites. “It acts as another content experience on the page,” she says. “We’ve seen consumers spend an average of 47 additional seconds with the IAB Portrait ad [and] play 24 seconds more video.”?
Getting consumers to interact with display ads is one of marketers’ top challenges, say industry experts. Market research firm IDC said in May that display’s share of overall ad budgets increased to 33% last year, from 29% in 2009. A July 2010 study from Google’s ad management service DoubleClick reported that US display ads generate only a 0.1% click-through rate. ?
Yahoo has also augmented its display offerings. A year after Facebook overtook it for the top share of online display ad impressions, the company expanded its Yahoo Smart Ads unit this May to include behaviorally targeted video ads. ?
Consumers can participate in surveys, join email lists and share content to their social networks through the ads, in addition to viewing branded videos. Although Facebook leads the other companies in share of impressions, industry experts say display ?ads are trending away from click-throughs to become destinations in and of themselves. ?
“In terms of the creative execution, on Facebook you’re really limited,” says Vik Kathuria, managing partner of corporate strategy and digital investment at MediaCom. “It’s a small box that you can’t do a whole lot with, versus on Yahoo, the canvas is much larger and you can actually do some really cool rich media creative executions, which is really important.”?
Kathuria adds that Yahoo and AOL’s fortification of their display units may see them through the current shift in online advertising. “I don’t think at any point that folks like Yahoo need to be worried about Facebook cannibalizing them, because from our perspective, we’re using them for two very different strategies,” he says. ?
However, Tom Arrix, VP of US sales at Facebook, says that his company’s ad offerings provide ads in the context of their friends’ “likes” and dislikes. “We want the ads to be incredibly relevant. We want the ad experience to look more like content than to follow more of a disruptive track than you see out there,” he says. “I think Facebook’s approach is very consistent with how content is showcased on the site.” ?
Arrix adds that Facebook’s launch of Sponsored Stories, which pulls content from consumers’ posts for promotional purposes, lets advertisers have consumers work for them. ?
“Now it’s about people amplifying the message versus the brand amplifying the message,” he says. “I know that in the world of rich media, there are vendors like AOL where there’s activity across the page. We don’t do that. It’s the more engaging experiences that we would showcase in our ads.”