Forget Behavioral Targeting – Ad Format Is the Real Problem (pubexec.com)

Publishers get roughly 4% more revenue for an ad impression that is cookie-enabled – or personalized – versus one that isn’t, according to a recent study by researchers at Carnegie Mellon University, University of Minnesota, and University of California, Irvine. That’s not much. And while the sample was limited – they only reviewed ads for one “large U.S. media company over the course of one week” – it highlights a question publishers have been grappling with for a long time: Is cookie-based ad targeting worth it?

Given the mounting costs of investing in data technology, reputation issues (the “creepy factor”), and regulations like GDPR and CCPA that challenge behavioral ad targeting, the study’s findings suggest that the benefit is minimal. However, as I see it, publishers are focusing on the wrong issue.

The Truth about Display
The problem isn’t necessarily the ad targeting itself; rather, it’s the ad format that’s inherently flawed. According to Smart Insights, the average display ad click-through rate (CTR) across all formats is a measly 0.05% — or 5 clicks per every 10,000 impressions. These “performance” ad units simply aren’t performing, which undercuts publisher revenue while taking up valuable website real estate.

After being bombarded with them for years, consumers just don’t like display ads. This is why a majority (51%) believe publisher sites should feature fewer ads. As a result, more are tuning out the ads or blocking them completely. And while making ads more targeted may increase their effectiveness, it does so only marginally.
more at: https://www.pubexec.com/post/ad-format-problem/

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