Mobile Ad Formats Lab #1 — Banner Ads

This blog post marks the beginning of a series on the different ad formats available in the mobile apps world. Deciding which ad format to choose and where to place that once you have a decision, is one of the main dilemmas app publishers face.

In this series we will discuss the pros and cons of every mobile ad format, best practices and common mistakes made by publishers in an effort to get a better understanding of the different monetization options and challenges that publishers have to face when designing and implementing an app’s monetization strategy.

Banner Ads

Banner ads are rectangular image, text or interactive ads that are placed in an app, usually on the top or bottom of a screen and are visible all the time. They can be static or animated and can have different sizes. Ads displayed within the banners are usually refreshed after a fixed timeframe.

Banner ads are one of the oldest and most traditional ways of monetizing an app and they are widely used in desktop formats, since the early days of display advertising, before making the transition to mobile.

There is a lot of controversy around what works best with banner ads, both from the advertisers’ point of view but also from the app publishers’ corner. However, they are still around and account for the largest part of the ad format pie.

The marketer’s perspective

An affordable ad format for brand awareness

It’s really interesting why banner ads are so widely spread in the display advertising industry since they have a really bad name in both terms of effectiveness and performance. While trying to get into that, we will attempt to understand why marketers still use this format extensively.

Pros +

  • Affordable and easy to setup

Banner ads are easy to set up by anyone and can go live really quickly. Thousands of impressions can be bought with small spending so this makes the format attractable to individuals or marketers with small budgets.

  • Wide Reach

Due to its popularity in the publisher community, marketers can find and reach users, in almost every part of the world.

  • Brand Visibility

For anyone that has been in the world of marketing for some years, the marketing rule of 7 states that a prospect needs to “hear” the advertiser’s message at least 7 times before taking an action to buy the product or service. Banner ads are the best way to implement that. It’s the simplest and safest way to get the name of a product or a brand to as many people as possible out there.

  • User Relevance

Along with the latest advancements in programmatic with banner ads, marketers can find their ideal audience fairly easily. With the use of dynamic banner ads, marketers are able to retarget users by leveraging their past behaviour or other demographic information and allocate the right placement to reach the right user.

Cons –

  • Banner blindness

A term has been coined to describe why users barely pay attention to banners; it is called “banner blindness”. According to this, users dismiss the banner as part of the content they are looking at, neither closing it nor paying attention to it.

  • Limited Space

Limited space available in banner ads makes it difficult for marketers to get their message out.

  • Accidental Clicks

One of the main pain for banner ads — especially on mobile — is the result of accidental clicks. Usually this could be a case of “fat fingers”, where (because of the placement of the ad within the context of the app) users accidentally click on the ad.

  • Low CTR (Click Through Rates)

Studies show that the engagement rates on banner ads are one of the lowest in the industry and go as low as 0.06% CTR. In layman terms, you are more likely to survive a plane crash or win the lottery than to have someone click on a banner ad.

The publisher’s perspective

An easy to setup mobile ad format

For app publishers, banner ads have always been one of the most popular formats to use in their apps, even if that format is low performing. Some of the pros and cons of using banner ads within a mobile app are the following:

Pros +

  • Easy to implement

Banner ads are fairly easy to implement and go live within an app.

  • Low mobile data consumption

Mobile data consumption needed is fairly low compared to other ad formats.

  • Minimal User Disruption

With banner ads, users are still able to interact with the content of the app, making banners a non-intrusive solution for monetization.

  • Best Fill Rates

With the extensive usage of banner ads from marketers, banner ads receive the highest fill rates in different geographies around the world.

Cons –

  • Low engagement rates

Users almost never click on a banner ad, resulting to low CTRs and eventually low eCPMs. The revenue potential from banner ads is quite low compared to other ad solutions. Especially when used on screens where the main gameplay lies, banner ads have zero to minimal impact.

  • They require space in the app’s UI

Banner ads take space within the app’s design and therefore the publisher has to change the UI of the app to fit the ads. This reduces the app’s display real estate.

  • Low Quality

In some cases and due to their widely use among marketers with a lot of them having low budgets, creatives may be of low quality and can create a spammy feel in the context of an app.

To conclude, in this article we tried to understand the banner ad format both from the perspective of the app publisher but also from the side of the marketer.

In the next article we will discuss some important metrics that app publishers have to deal with when working with banner ads, along with some tips and best practises with real world examples.