Digital Advertising: Click-Through Rates

With digital ad spend swiftly rising year on year (Emarketer) it’s hard to ignore the change in the advertising landscape. We’ve come a long way from flashing banner ads and invasive pop-ups (although they are very much still around). 

Advertisers are suffering from consumer ‘banner blindness’ and so are being forced to move away from standard formats and to be more creative in reaching their audiences. We all know that there’s a huge range of online advertising formats out there, but which ones should you bin and which ones should you adopt?

Check out our infographic below which details the average click-through rates from a range of online advertising formats.


Digital Advertising Click-Through Rates


Sources listed at the bottom of the page.

We’ve focused on click-through rates here as they are one of the most widely used metrics to evaluate the effectiveness of an ad format to drive response. However, it’s important to note that with any rich media ad unit that features brand creative, engagement rates are only one side of the coin. For many advertisers digital advertising is as much about branding as it is direct response. However, with attribution in brand uplift difficult to measure without focus groups and consumer research, click-through rates will remain a key metric for some time to come.

 

Trends in engagement

The building trends in digital advertising include real time bidding, online video, social media and of course, mobile. Something that can be be seen in all these formats is the buzzword of the moment - yes, native advertising. It seems pretty obvious that relevant, integrated advertising is going to be more effective these days than the more traditional methods. But what do the stats say?

Let’s look at the click-through rates (CTR). At the lower end of the scale display ads are seeing a CTR of around 0.11% and falling (Smart Insights). Mobile banner ads are performing slightly better at an average of 0.35% CTR (Marketing Charts). In fact, mobile advertising seems to perform better than desktop all round. Facebook news feed ads on mobile devices have an average CTR of 3-6% (Digiday) - a pretty impressive statistic. But what do you do if you want to completely trample those figures? You invest in mobile video ads. With a staggering reported CTR of 11.8% (Mobile Marketer) it’s hard to push to one side. Combine that with some clever native advertising and you’re on to a winner.

 

Video advertising in the marketing mix

We’re seeing brands and publishers increasingly taking advantage of these engaging and contextual advertising formats - and it’s paying off. A recent IAB report found that advertising revenue in the US from digital video increased by 24% in 2013 from the previous year and mobile revenue soared by 145% in the first half of 2013 (IAB). David Silverman, a partner at PwC US comments:

“This report not only confirms that brands are making a greater commitment to interactive, but also points to the fact that mobile and digital video are being identified as integral elements of the marketing mix. Internet advertising’s ability to impact and engage is evident across digital screens, whether big or small.” (IAB)

It’s an exciting time for the industry - with these developments in digital advertising technology opening up a better way for advertisers to reach their audiences. There are certainly some doubts surrounding native advertising, and there’s some catching up to do in mobile marketing, but the industry has come a long way since traditional advertising formats which arguably have pushed consumers away with their irrelevancy and invasive nature. Consumers are embracing new screens and new media, so that’s where we need to be.

In our next piece we will be exploring why engagement rates in mobile advertising is becoming increasingly higher than that of desktop.

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Related content:

Desktop
Display ads 0.1%
Google display 0.4%
Facebook news feed 0.5% - 2%
Facebook display 0.12%
Twitter 1% - 3%
Video 4.25%

Mobile
Facebook news feed 3% - 6%
Display ads  0.35%
Native ads 1.37%
Video 11.8%