February 2, 2011 § 3 Comments
Advertisers love banner ads, and oddly, pay a premium for them – despite the .1% click-through rate. But the undesirable (and inevitable) effect of banner ads is the ad gutter – the space around the ad that the user learns to ignore. Banner ads always create an ad gutter – even with savvy placement – and train users to look elsewhere for useful content.
This is one of the reasons advertisers are excited about Facebook – it enables them to target ads to their prime demographic, lessening the need for flashy, and annoying ads that twirl and bounce. Unfortunately for these advertisers Facebook created its own ad gutter instead of attempting to integrate ads with content.
Facebook ad performance is deplorable – despite the higher cost, Facebook ads actually get about half the clickthroughs of banner ads. Even more interesting: younger audiences don’t seem to interact with these ads at all. I would guess that young people, more familiar with internet browsing are sensitive to the ad gutter. They have intrinsic understanding of how website content is structured – just like their parents intrinsically understand how newspaper content is structured. It comes down to this: I don’t know if Facebook’s ads are relevant to me, because I never look on the right hand side of the page.
What should Facebook do? Online, there is obviously a tradeoff between showing ads (to make revenue), and keeping users happy. The advertiser and the user are diametrically opposed, with the website (in this case, Facebook) stuck in the middle trying to compromise. No wonder banner ad clickthroughs are abysmally low – why would a user want to interact with something annoying? Advertisers should engage with potential customers, not annoy them. By creating an ad gutter, Facebook is trying to minimize the damage to users, while paying lip service to advertisers.
Creating engaging advertising content is costly, and doesn’t scale to multiple websites the way banner ads do. But Facebook seems like a great place for experimenting with new advertising methods – Facebook doesn’t support standard ads anyway, and the audience is big enough to justify the cost. More importantly, if ads are well developed why should they be resigned to the ad gutter? I’m sure plenty of advertisers are interested in more revolutionary ideas, so the question is – why isn’t Facebook? If there is any site that could bridge the gap between content and advertising, it is Facebook (…or Twitter).