Web Banners Do the Trick, Study Suggests

Those much-maligned banner ads may be clicking with Web users after all.

A study of Internet users to be released today shows that banner ads--online billboards criticized as ineffective--help make consumers better aware of brands.

The study, co-written by USC Marshall School of Business assistant professor Xavier Dreze, should come as welcome news to the expanding roster of Internet companies trying to build revenue by selling advertising.

Dreze and co-author Francois-Xavier Hussherr, a researcher with the Paris-based National Center for the Study of Telecommunications, surveyed 807 people about which ads they remembered after long searches on the Web. The researchers used eye-tracking devices on 49 of the Web surfers to determine which ads they actually saw.

People noticed 50% of the banner ads on sites they visited, Dreze and Hussherr found. And 11% of Web surfers remembered the ads they saw the next day.

Dreze, in an interview, said that although the figures may seem underwhelming, they are impressive compared with so-called “click-through” rates--the way many advertisers measure the effectiveness of online ads. Less than 1% of Web users interrupt searches or other online activity to “click” banner ads for more information from advertisers.

Advertisers need to change the way they think about banner ads, Dreze argues.

“Just because people don’t click through right away doesn’t mean the ad is not effective,” he said. “A day or two days later, people remember seeing something.”

Dreze said the study, funded by France Telecom, owner of that country’s second-largest Internet portal, suggests that banner ads may be effective tools for building brands.

That notion slowly is gaining support in the Internet marketplace. A recent survey of 40,000 Web users commissioned by a unit of Microsoft Corp. found that online advertising campaigns heightened consumer awareness of brands by as much as 60%. Banner ads were the biggest element in the campaigns.

The best-remembered advertiser in the Microsoft study used banners that invited viewers to play a game offline. (Identities of advertisers participating in the study are confidential.)

“It was a highly interactive campaign,” said James Kinsella, general manager of sales and marketing for Microsoft’s interactive media group, which includes MSNBC. “Enriched media tends to drive up recall.”

Dreze also found that interactivity was important. People tended to remember banners that used sound or involved a game, he said. But banner size, color and location on the site didn’t make a difference. Animation likewise didn’t improve effectiveness of banner ads, he said.

Dreze speculated that animated banners don’t work because people assume they are ads. And in general, he said, “people try to avoid ads.”

Web users are receptive to banner ads that are targeted to their interests, said Charlene Li, a senior analyst at the consulting firm Forrester Research. In a recent survey, 65% of people said they were likely to click on a banner when shopping online.

“If you go to a shopping [site] for a baby gift, and you see a banner for a baby gift, you’re going to click on it,” Li said.

And, she said, some banners are so sophisticated that consumers can use them to conduct transactions without leaving a Web site. Spiegel Inc. unit Eddie Bauer has such a banner, Li said.

Still, advertisers are not likely to abandon click-through as the yardstick for evaluating banner ads any time soon, she said.

“You can’t do a lot of branding in that little space,” said Li, noting that the banner ads are too small to contain much of a message. “They are trying to use it as a direct-response mechanism.”