Location Matters for Online Ads

Online advertising will finally come into its own this year, with sales that match print advertising. If you usually advertise in print media and you’re moving to online ads, you’ll be pleased to hear that they share certain important concepts. These include the importance of location and the idea of the “fold.”

Before I get into that, let me give you some numbers to back what I’ve said about online advertising. If you’re still convinced that print will always be bigger than the Internet, think again. It’s growing fast – and this year, according to emarketer, it’s set to catch up with print, at least in the U.S. The digital marketing research company noted that online ad spending was expected to reach nearly $40 billion. In fact, emarketer said that “This year, US online ad spending will exceed the total spent on print magazines and newspapers for the first time, at $39.5 billion vs. $33.8 billion.”

That trend is set to continue, in fact, with online ad spending continuing to rise and print ad spending continuing to fall. By 2016, emarketer expects online ad spending in the US to reach $62 billion, and print ad spending to level out at $32.3 billion. Over the same period of time, online ad spending will play a tremendous game of catch-up with TV advertising – not quite reaching the same levels, mind you, but certainly closing the gap considerably. Compare these numbers: in the US in 2011, advertisers spent $32 billion on online advertising and $60.7 billion on TV advertising. In 2016, those numbers are expected to reach $62 billion and $72 billion, respectively.

Even with the popularity of videos on the Internet, online advertising has more in common with print. In other words, location matters. If you’re familiar with newspaper ads, you know that they’re often classified as being either “above the fold” or “below the fold.” The online advertising field uses those terms to designate whether or not a visitor needs to scroll to see a particular ad. Anything they can without scrolling is “above the fold,” while everything else is “below the fold.”

How is this significant? The amount of attention your ad receives depends strongly on where it gets placed. Chitika Insights completed a research study involving hundreds of millions of impressions to determine how an ad’s location either above or below the fold affected the attention it received – specifically, the study looked at ad click-through rates. Chitika’s sample set fell within the week between February 1 and February 8, 2012.

Not surprisingly, above the fold ads performed better. They boasted an average CTR of 76 percent. Chitika noted that this rate was 36 percent higher than what they saw for ads positioned below the fold. Why is that? About two years ago, Jacob Nielsen conducted an eye-tracking study that yielded the answer. He found that users, on average, spend about 80 percent of their online browsing time above the fold on websites.

What does this mean for you? According to Gabe Donnini, “For the online advertising industry, this research supports the fact that location is one of the most critical factors for click-through-rates and should be considered when developing retargeting spend plans and advertising strategies as a whole.” So if you’re considering your ad spend and weighing the price differences of ads placed above and below the fold, remember that you’ll be getting around a third more bang for your buck above the fold, and budget accordingly. Good luck!

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