How Banner Advertising Changed Digital Marketing in 2002
Banner spending is stabilizing after two rough years, but the format recovering isn't the one that crashed: rich media replaced generic reach buys.
After two years of falling ad budgets and a wave of failed dot-com advertisers, banner advertising spending is finally showing signs of stabilizing this year. But the format coming back isn’t quite the one that crashed, and the differences say a lot about what advertisers and publishers learned along the way.
The format has gotten more sophisticated
Static, single-image banners in the Interactive Advertising Bureau’s original standard sizes are increasingly being replaced by rich media formats built with Macromedia Flash, ads that animate, expand or let a visitor interact without ever leaving the page they’re on. These formats cost more to produce than a static banner did, but early data from advertisers running both side by side shows meaningfully higher engagement, which has made the extra production cost easier to justify even with tighter budgets than two years ago.
Advertisers are buying narrower, not broader
The reach-at-any-cost buying that characterized 1999 and 2000, purchasing banner inventory across the largest available audience regardless of fit, has mostly disappeared along with the venture funding that paid for it. Advertisers still buying banner space this year are far more deliberate about audience match, favoring smaller, more targeted sites over the biggest portals, and tracking post-click behavior rather than treating impressions or click-through rate as the only measure that matters.
Pop-ups are becoming a liability, not just a nuisance
A subset of advertisers moved toward pop-up and pop-under ads over the last two years, chasing the higher click-through rates the format could produce compared to a standard banner. That approach is starting to backfire this year, as user frustration builds and browser toolbars begin shipping with pop-up blocking features. Advertisers leaning heavily on pop-ups are watching effective reach shrink as more of their intended audience simply never sees the ad at all.
Budget is splitting between formats, not concentrating in one
Where 1999 and 2000 saw banner advertising treated as the default online ad buy, this year’s advertisers are running a genuine mix: display for brand and reach goals, keyword bidding on Overture and Google’s AdWords for direct-response goals and affiliate arrangements where the budget only pays out on a completed sale. Banner advertising hasn’t disappeared, but it’s no longer everyone’s first or only move, and that competition has forced networks and publishers to prove their format’s specific value rather than assume advertisers will keep buying it by default.
What this means going forward
The businesses that came through the last two years still buying banner ads are, almost by definition, the ones who found a way to make the format pay for itself, whether through better creative, sharper targeting or a clear brand objective the format serves. That’s a smaller, more disciplined market than existed in 2000, but arguably a healthier one, built on advertisers who kept the format because it worked, not because it was the only option anyone knew.
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