Which ad formats perform best online?

There’s no question that digital advertising is now the name of the game when it comes to selling a service, a product or even an idea.

It is indeed the trend in the world of marketing.

But the burning question is what ads work best in this complicated digital world that everyone is moving to?

Google AdWords? Facebook newsfeed ads? YouTube video ads? Native programmatic (known in the old days as advertorials)?

Every company spending money on online advertising wants to know which online ads perform best. But the answer to that million-dollar question is an old consultant’s favourite – it depends, says Doug Lacombe, president of Communicatto, a digital marketing firm in Calgary.

“Asking which ad types perform ‘the best’ is like asking which car performs the best. It depends on what you’re trying to do. Get groceries? Win a race?,” he says.

But that shouldn’t stop people from asking the question and doing research.

“We can use benchmarks and small test campaigns to better understand what works best in your circumstance,” explains Lacombe.  “In doing so we build up performance data and comparisons to continuously improve ad campaigns, creative, calls to action, platforms and formats.”

And industry benchmarks can help people understand if a particular campaign or ad set is performing or underperforming.

Click-through rate (CTR), the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement, is used by many to determine the performance of ads.

Here are some numbers to ponder from eMarketer, which has extensive research on the industry.

The most recent data shows CTR for display ads in the U.S. is .09 per cent; for paid search ads worldwide it’s 2.8 per cent; for social media ads worldwide it’s 1.9 per cent; for video ads in North America it’s 0.26 per cent; and the total click rate for emails in North America is 2.4 per cent.

Markus Lutz, head of marketing with StackAdapt, a programmatic native advertising platform, says native advertising is a key driver in the industry today, hitting much higher rates of engagement than banner ads for example.

“People like it so much better because it’s not so much in your face,” says Lutz. “It’s like a natural piece of the website.”

In fact StackAdapt on its website explains it this way: “Did you know that native advertising drives a 25 per cent higher engagement rate than traditional banner ads? That’s because, unlike standard display, it allows your brand to tell a story and satisfies the consumer craving for quality content that resonates by delivering relevant content at the right time using the sophisticated targeting available through programmatic native advertising.”

Lutz says the key in advertising is trying to get conversions so that people will buy something directly from a company or people who will take action immediately. But there is the other aspect where companies are trying to get people to read their content and look at their website.

“From an engagement side I would say native advertising is definitely the piece that works best. You’re almost previewing a bit of the content that you will see on the pages you’re landing at. And if it’s something you’re interested in, you’re naturally going to click on it.”

Thereby driving traffic to a specific area on the website.

“Native advertising has been growing dramatically over the last five, six years. I think people feel those pop-up banner ads are more annoying than anything else and people really don’t like to see those that much anymore these days. Native advertising is in a way a much softer way to advertise.”