Banner ads didn't always suck. I should know. I helped create the first one.
My children tell me that's like inventing smallpox.
It was October 1994, a fantastically idealistic time on the Internet. Many pioneers of digital advertising believed it possible to create advertising so useful it's a service. We knew that if we asked ourselves, "How can we help people?" rather than, "What can we sell people?" we could rewire people's brains to seek out brand experiences, rather than run from them.
That first banner that Modem Media, the fledgling digital agency where I worked, built for AT&T, was helpful, and it was useful. At a time when people wondered what the Web was all about, it connected visitors of hotwired.com to a tour of seven of the world's finest art museums. It demonstrated how AT&T could transport people through space and time via the Internet — just as AT&T had done 100 years earlier with the first long distance network. Of those who saw the ad, 44% clicked.
Not only did people love the experience, they loved it enough to share it with friends. We were blown away. "People don't share ads," we told ourselves. "They share candy bars, and Coca-Cola, and porch swings." It was the first time I heard the word "viral" applied positively. We were on to something.
For a few wonderful years, while big agencies slept with their backs to the Web, we did incredible work for major brands — not ads, but content experiences that delivered utility. We knew, as my Modem Media boss G.M. O'Connell once said, that, "People read newspapers, listen to the radio, and watch TV, but they go to the Web to get things done."
By 1998, though, spending on Internet advertising had grown to the point where the established agencies woke up. Innovative shops like Modem Media, Razorfish, and Agency.com were snapped up. Before long, content and utility were corrupted by the only thing big agencies understood: reach and frequency. We were back to delivering what TV spots, radio spots, and print ads had delivered for years: sales messages. The rest, as they say, is history.
But this is a very interesting time. There's a perfect storm building that will give us all the chance to redeem ourselves, and change the course of advertising forever.
Consumers are migrating in droves to mobile devices. And as Clayton Christensen wrote in a recent Nieman Report, those consumers are focused on getting jobs done.
We check news on Twitter. We search Google Maps for directions. We compare restaurants on Zagat. We take photos with Instagram and upload them to Facebook. All those people on the elevator with their noses in their smartphones? They're not lazy or anti-social. They're getting things done.
And do you know what else they're doing? They're sharing stuff that interests them, or helps them, or that they think might help their friends. Mobile sharing is the new word of mouth.
Advertisers follow eyeballs. Mobile advertising revenues will grow from $4.06 billion in 2012 to $20.89 billion in 2016, according to eMarketer. Unfortunately, ad agencies have been taking the worst ad experience ever invented — banners — and simply shrinking them to fit mobile screens.
For consumers who are focused on getting things done, banners are a nuisance at best, and invisible at worst. Recent studies by Trademob show that about 40% of clicks on mobile banners are due to "fat finger syndrome," meaning consumers click on mobile banners by mistake, or because advertisers trick them into clicking. And nobody is going to share a mobile banner, because they offer no help, and no value, to anyone. If advertisers thought there was even a snowball's chance in hell that people might share their ads, they'd put "share" buttons on them.
Because of Storms 1 and 2, many of the companies that produce the content that ads have been traditionally placed next to — especially old-school publishers with print properties to support — are suffering. Heck, even Google has seen declines in cost per click as consumers migrate from PCs to smart phones. Ineffective ads on mobile mean advertisers pay less for space than they did on PCs, and much less than they used to pay for print or TV. As a result, there are a lot of very talented producers of useful content, especially journalists, on the streets.
Learning to help instead of sell
"Customer service is the killer app of the Web," Google's Eric Schmidt, then with Sun Microsystems, said way back in 1998. Brands such as Google, Zappos, Amazon, eBay, and others win because they ask "How can I help you?" instead of "What can I sell you?"
Advertisers and their agencies, for the most part, don't know how to be helpful. Thirty-second TV commercials, print ads, radio ads, and direct mail are all forms of content. But nobody's addicted to them, because most ads ask, "What can I sell you?" Thousands of people have saved every issue of National Geographic in their attics. How many have saved every Viagra ad ever created? If you want to use content to build relationships with people, don't turn to an agency — at least not a traditional agency.
The future of advertising lies not in ads as we've known them, but in helping all those people on all those elevators get stuff done, or entertaining them. The companies and people that understand content, and utility, will be the ones to thrive.
Given how many underemployed journalists, directors, designers, and such there are out there, this shouldn't be that hard to do. But most companies dabble. A three-minute YouTube video here and there does not represent a commitment to content.
The ones to watch are the brands and people that have jumped feet first into content and utility. Three spring to mind:
Red Bull launched Red Bull Media House in 2007. They describe themselves as "a multi-platform media company with a focus on sports, culture, and lifestyle." If you heard or read anything about Felix Baumgartner's historic jump from space you already know something about Red Bull Media House.
Last November, the Coca-Cola Company transformed itself into a digital publisher. The company installed a publishing infrastructure, hired editorial staff, and converted its corporate website into a rich, multi-media magazine. Besides creating a wealth of original content, this platform aggregates content from hundreds of partners around the globe. (Full disclosure: My firm, the Wonderfactory, helped them do it.)
Nike has mastered the art of utility, and transformed itself into a product and services company. Its lineup of Nike+ apps and devices help athletes track their performance, providing a wealth of data that can be used to improve workouts, or, someday, to create highly personalized content experiences that will keep athletes "married" to Nike for years.
To remain relevant to consumers who spend hours each day focused on smaller screens trying to get stuff done, marketers will have to think like publishers and technology companies. Like Red Bull, Coca-Cola, and Nike, they'll need to transform themselves into product and service companies. They'll need to ask consumers, "How can we help you?" instead of "What can we sell you?"
Can this really happen? A banner-ad pioneer can dream.
An HBR Insight Center