Do Banner Ads Have A Very Low Conversion Rate?

March 7, 2024

Do Banner Ads Have A Very Low Conversion Rate? | AIA Book in a free 30 minute strategy session

The world of online advertising is exciting, with many opportunities, and just as many confusing questions. From Google to Facebook ads and everything in between, it can be daunting to step into this world without a lot of knowledge regarding how these systems work, which could lead to some bad decisions and wasted funds.

In terms of Google Ads, most advertisers focus their efforts on the Search Network, which has the type of text ads that appear in between organic results in the search engine. But, Google presents another opportunity for ads in the form of banners, run on its Display Network. But are these ads worth the cost?

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What Is the Google Display Network and How Do Ads Work Here?

The Display Network is a group of around 2 million websites that Google states allow advertisers to reach roughly 90% of internet users. You can leverage these websites to run your ads and tap into an active and engaging audience that visits those websites.

The goal is that through display advertising, you catch those web visitors’ attention, make them click on the ad, and redirect them to your landing page where they hopefully take the type of action you want. In a sense, it’s just like how traditional banner or poster advertising would work – you catch the user’s attention with a banner, and that visual spark should lead to a particular action.

Of course, online it’s much easier for people to take said action than in the off-line world, which is why banner advertising is so intriguing. But, the Display Network doesn’t just feature banner (or image) ads. It allows you to run text and video as alternative ad formats as well, as well as combine the Search and Display Network to have more wide-reaching Google Ads campaigns.

How Does a Display Ad Work?

Before we learn about the average conversion rate of a display ad, it’s worth understanding how this form of advertising actually works.

Google designed this feature to help advertisers find their audience easier, as the advertising system makes room for some high-end targeting options.

Brands can:

  • Find new customers
  • Engage existing audiences
  • Create similar audiences based on their existing audience data
  • Target people most likely to want your products and services
  • Drive more conversions through automation

The major benefit of display ads is that the audience you’re targeting isn’t just the entire audience of a particular website in the Display Network. You can refine your targeting to make sure you reach only the section of that audience that would be interested in what you have to offer. Not only that, but the existing audience of a website might be more willing to act on a display ad if you also target key websites in the Display Network where your audience is.

On the Search Network, online ads reach people when they are already looking for something, as the ads are triggered by the search query. But on the Display Network, banner ads can help you redirect their attention to make them aware they have an interest in a particular product or service.

For instance, if you sell workout equipment, it makes a lot of sense to showcase your banner ads on wellness/workout websites. Those audience members have an explicit interest in the domain already and are reading about workouts or how to become healthier. If they also see a banner ad with home-workout equipment, curiosity could take over.

Even if they don’t buy right then and there, display ads have remarketing options that allow you to reach those users again and remind them of all you have to offer.

Fine, But What’s the Average Conversion Rate?

Now, let’s look at some stats. Overall, if you consider Google online ads, the stats on the Display Network are much lower than the ones on the Search Network, according to data provided by WordStream:

  • Click-through rate: 1.91% for search ads, 0.35% for display ads;
  • Cost-per-click: $2.32 for search ads, $0.58 for display ads;
  • Average conversion rate: 2.70% for search ads, 0.89% for display ads;

The stats can also differ depending on your industry. For instance, real estate scores the highest click-through rate on the Display Network, with 1.08%, but its average conversion rate is a bit below average, with just 0.80%. On the Search Network, however, it has a conversion rate of around 2.47%.

But, what do these stats mean?

Advertisers looking for opportunities that bring high conversion rates will likely not be impressed with the benchmarks in the Display Network, especially when put side by side with the search ads.

Even if the data shows banner ads have a low conversion rate, it doesn’t necessarily mean your efforts are in vain. These ads cost, on average, a lot less per click than search ads, which means you could get more results in the Display Network than Search with the same ad spend. The data is also pulled from US accounts, but if you run the ads in Australia, you’ll be paying around 5% less on a click.

Display ads can help you reach some different goals than Search ads, so investing in them isn’t necessarily a bad investment. If your stats are below the industry average, it means you have some room for improvement, and the focus should be on optimising your Google Ads Campaigns.

How to Improve Your Display Ads

To run successful display ads, it’s important to give just as much focus to these campaigns as you would ads run on the Search Network.

A good Display Network ad campaign can help you reach a variety of different goals, from increasing brand awareness to selling products, and more.

Here are a few tips to optimise your display ads:

1. Make a Good First Impression

Banner ads need to be eye-catching if you want to attract the attention of your target audience. Since they are going on a site for a different purpose entirely, it’s important to ensure your banners are appealing enough to distract them from the content of the site and make them click on your ad.

Some of this can be achieved through targeting: showing your banners to the right people, at the right time. But, for the most part, it pays to invest in the creation of high-quality banners that get people’s attention, especially if you’re running ads for lead generation and the target doesn’t have previous interactions with you.

And you want that good first impression to leverage the even bigger perks of running a remarketing campaign on the Display Network.

2. Focus on the Call to Action

The banner isn’t just a photo or digital design. People need a bit of context to understand what the banner is asking from them, which usually comes in the form of a call to action.

The CTA should encourage people to take a particular action, but it should also be indicative of what that action is. If you’re running a lead generation campaign asking people to sign up for something, a call to action like ‘Buy Now’ or ‘Contact Now’ is misleading, and will tank your conversion rates.

3. Think of the Consumer Journey

The ad quality increases the click-through rate, but the conversion rate is more determined by the user experience customers find on your landing page.

If users don’t like what they see there, they will quickly hit the back button, so make sure the landing page:

  • Works as intended (accessible on mobile devices, loads quickly, has a good template, etc.);
  • Is relevant to the banner ad, to avoid misleading your target;
  • Reinforces the ideas/messages in the banner to provide continuity;
  • Has good, sales-driven copy

Even if the landing page for the ads is just a web page of your site, you need to make sure that page fits into the consumer journey the banner ad is establishing. If your banner boasts a 50% sale on a particular product, then that’s what the landing page should say as well.

Any mismatches between your landing page and ads could lead to a missed conversion, and even a bit less trust from your target audience, who may feel a bit cheated.

Final Thoughts: AIAD Can Help

If you need help mastering the arts of Google AdWords, on the Search or Display Network, Australian Internet Advertising can help. Our Google Ads team can analyse your current efforts and devise a better plan to allow your business to get the results you need efficiently, with the lowest ad spend possible.

Want to know more about our online advertising services and how we can help? Contact us online, or call us at 1300 304 640.

Billy P.

About The Author

William Polson founded Australian Internet Advertising in 2013 and has over 12 years of experience immersed in Digital Marketing.

With an in-depth level of digital marketing knowledge, William has been sort after by and worked for, many large national brands including Subaru, Blooms The Chemist, and Nova 96.9.

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