The humble banner ad turns 30

Photo by Firmbee.com on Unsplash.

It was just over 30 years ago on October 27, 1994, when Wired Magazine’s website hotwired.com turned on the world’s first banner ad from AT&T.

Since then, the digital display advertising mainstay has evolved from a simple clickable asset at the top of a webpage to one that today uses everything from videos to virtual reality for the consumer and programmatic buys and artificial intelligence for the advertiser.

Reflecting on three decades of evolution, AdNews spoke to adtechs and agencies about how the banner ad has progressed since those early days of the internet in the mid 1990s.

Vudoo CEO and founder Nick Morgan said that when the banner ad made its debut, it had a 44%  clickthrough rate (CTR) that lasted over four months. 

“User behaviour has since drastically changed, with commercial materials being avoided like a plague; in stark contrast, CTRs are now considered high when they reach double digits,” he said.

Convo Media’s CEO Monique Harris said she remembers selling one of the first banner ads in Australia back in 1995, having secured $500 for a banner ad on the homepage of Yellow Pages for Myer Direct’s Christmas campaign.

“Over the years, I’ve witnessed the evolution of banner ads from static images to Flash, animated GIFs, mobile-responsive formats, real-time bidding, pop up ads, performance ads, video ads and now content-driven advertising,” she told AdNews.

“There was a time when we thought interrupting consumers online was the key to success, but that often backfired.

“Fortunately, the era of 'banner blindness' is behind us. Today, non-intrusive, clever content marketing using technology and data targeting is delivering impressive results for advertisers. It’s exciting to see how far we’ve come!”

PubMatic’s chief revenue officer APAC, Jason Barnes, said that his first encounter with one was back in 1996 on his Hotmail account - a slowly loading, pixelated image that feels like a relic of another era.

“Back then, limited supply was a constant challenge, with websites selling out of ad space all too quickly - adding ad units and increasing refresh rates were key strategies we relied on to boost revenue,” he said.

LoopMe CEO and founder, Stephen Upstone, said having entered the ad industry the year the first banner ad went live, he remembers it as a time buzzing with optimism and opportunity.

“What sticks out for me more, however, is the first mobile banner ad, delivered six years later by Media21 on Football365 - from these humble beginnings, mobile has defined the industry and currently represents over 60% of global spend,” he said.

Mantis MD Fiona Salmon, said building upon the heritage of print advertising, display advertising created a good on-page experience and made the pay-off for users clear – quality advertising for quality publishing.

“The successful launches of Netflix, Disney, and Amazon’s ad-supported tier shows that audiences are once again comfortable with this trade off, seeing ads as a key part of the content experience, not an interruption,” she said.

“Similarly, it was with banner ads that the impact of contextual relevance became clear. With the slow depreciation of the cookie, this is once again coming into vogue as an effective way to drive engagement and ensure spend is highly targeted.

“Though the leaps and bounds the digital advertising industry has taken in recent years would have been unimaginable back in 1994, we’re coming back to many of the principles that made banner ads a success in the first place.”

Prophesy Digital's digital media strategist, Mehrak Saheb, said banner ads started out as the undisputed kings of digital advertising, with simple GIFs grabbing consumer attention in the early days.

"As technology advanced, rich media transformed banners into interactive experiences—car brands showcased features, film studios offered behind-the-scenes exclusives, and FMCGs gamified the experience, all within those compact rectangles," she said.

"Creativity was thriving, pushing the boundaries of what could be done in such a small space."

As search, social, and video ads gained traction, investment in banners began to decline, however, and arogrammatic advertising became the answer, the focus shifted to precision - audience targeting took priority, and creativity took a back seat.

"We grew a bit lazy, assuming that as long as we reached the right people, the content itself didn’t matter," she said.

"Publishers crammed pages with ad spaces at the expense of aesthetics, and the banner, once full of creative potential, reverted to its simpler, less imaginative roots.

"Today, banners are more about quantity than quality. What was once a canvas for innovation has, unfortunately, become digital wallpaper. They still work, of course, but not nearly as well as they would if we put some soul back into them."

Quantcast's senior sales manager for NSW, Ryan Linahan, said that in 1994, banner ads were simple, static images displayed on low-resolution screens, typically 800x600 pixels, but today, banner ads have shifted from static visuals to dynamic, interactive, and personalised experiences.

"Cloud-based ad servers have revolutionised scalability, enabling advertisers to run multiple campaigns across platforms with ease," he said.

"Automation and programmatic channels now drive ad placements, allowing brands to connect with consumers in real-time more efficiently."

He said the biggest change has been the mass proliferation of data and AI, which when powering programmatic advertising, has made banner ads far more targeted and relevant.

"Advertisers can now tailor ads to specific audience segments based on behaviour, preferences, and location, optimising campaigns on the fly—something impossible in 1994," he said.

"As such, even as there are more ads today, they’re smarter, faster, and more engaging, transforming how brands approach digital marketing and how consumers interact with ads online.

Lexlab's head of digital, Maija Gwynn, said in her first role in the industry during the dotcom boom in the UK, when display ads had been around for about five years, there was no standardisation at all.

"The ad ops team would create banners (usually weird little thumbnail sizes) wherever they could negotiate space on the pages to deliver on the huge budgets being thrown into 'new media'," she said.

"I was at ninemsn when they became the first publishers in Australia to monetise their remnant banner inventory, often selling it on a cost per acquisition basis. It was revolutionary, and with no social media to compete with and paid search in its infancy, it was the first opportunity for advertisers to buy digital media on this basis."

She said that the thought of selling banners on a set CPA seems crazy now, but at the time it was a very lucrative and new revenue stream.

"It was also at this time when banners were about 10 years old that the pricing race to the bottom hadn't yet begun due to less competition for the digital dollar, and premium, niche environments could still command CPMs of up to $100," she told AdNews.

"And at this point the larger formats hadn't even been created yet. The same sites can now be bought for less than $10, which results in a really challenging situation for publishers."

The Pistol's media partnerships and strategy director, David Lee, said the most interesting area of evolution in the last 30 years to him is the ongoing journey towards demonstrating impact.

"Although not exclusive to banner ads, the format has probably faced the most scrutiny regarding verification and effectiveness, forcing the industry to question whether they truly drive business impact, or if we’ve been overly reliant on platform and channel-specific metrics," he said.

The world's first banner ad - run by AT&T on hotwired.com in October 1994

Australians still respond positively

Despite some thinking the banner ad may be outdated in today’s advertising landscape, research from LoopMe, a company that uses artificial intelligence to improve brand advertising performance, shows that Australians still engage with the format.

Nearly one in five (18%) Australian consumers make a purchase from an ad on a webpage every few months, with 9% buying this way weekly or monthly and 18% of those aged 35 - 44 buying from online ads each week, according to the study conducted earlier this month.

While over half (54%) of Australian consumers today don’t notice the actual placement of where an ad sits on the webpage, ads embedded in the content draw 17% of attention, bottom-of-the-page ads are noticed by 7%, and the banner ad at the top of the page by 6%. 

Mobile accounts for over 60% of traffic and LoopMe’s data reflects the popularity of this device, with 14% of consumers interacting more with ads on mobile, compared to only 7% interacting more on desktop or laptop.

With publishers increasingly looking to digital advertising to fund their publications and journalism, 23% of respondents said they are happy to see non-intrusive ads if they keep online journalism free and 12% would rather see ads than pay to read content.

Privacy, personalisation and publishers

Bench Media’s head of performance, Aaron Jansen, said that banner ads have transformed from simple, standardised ad units into hyper-personalised, highly targeted, and immersive banner experiences.

“Innovations in adtech have accelerated this evolution, introducing interactive and customised rich media formats, such as social and video display formats, as well as dynamically fed content that enhance user engagement whilst creating a seamless user experience,” he told AdNews.

“Traditional banner ads can still be impactful, but in today’s cluttered web environment, they need to stand out to capture attention given users have become accustomed to overlooking standard formats.”

Jansen said that while the core objective and premise of a banner ads remains the same today - generate attention and evoke an emotional user response - advancements in AI mean the future lies in delivering highly personalised and interactive rich media experiences that foster deeper engagement, prompt user action, and create lasting and memorable brand impact.

“Effective creative efforts are most successful when aligned with the appropriate audience, and ongoing advancements in targeting capabilities will significantly boost ad effectiveness,” he said.

“Banner ads will continue to play an important role in an omnichannel marketing strategy, tailored to complement other media and enhance the overall customer journey.”

PubMatic’s Barnes said that banner ads remain a cornerstone of digital advertising, offering the scale and reach that brands crave, but data privacy and the shift towards quality first-party data will shape the next decade.

“Publishers with loyal audiences will be well positioned to thrive in this environment, as the pendulum swings back towards the supply side,” he said.

“It will also be exciting to see how the humble banner ad continues to innovate and engage audiences as more digital formats emerge."

Although ads can now be programmatic, more precisely targeted and even shoppable within its interface, Vudoo’s Morgan said he predicts banner ads are about to get more advanced with AI and augmented/virtual reality becoming more accessible.

“With commerce media booming, the pressure is on for digital channels to offer more powerful, personalised, integrated and innovative ad formats,” he said.

“Banner ads will need to evolve accordingly, become smarter and more adaptable to fit into the seamless, tech-driven experiences that consumers expect.”

He said that as consumers wield more control and demand better digital experiences, advertisers will have to keep up by creating formats that are not only innovative but truly meaningful to users.

“I foresee digital advertising moving towards hyper-personalised, almost invisible forms of engagement, where adverts feel more like part of the user experience than an interruption,” he said.

“In fact, high CTRs may be making a comeback as every piece of content can become a storefront. The potential is huge.”

Convo Media’s Harris said the days of ‘spray and pray’ banner ads are long gone, with the future being in blending great creative with content-driven formats that complement the surrounding content, making ads less intrusive and more engaging.

“This approach is essential for advertisers looking to connect with consumers online,” she said.

“At Convo Media, we’ve seen fantastic results for our clients by pairing content-driven units with rich media. This allows users to interact with videos, surveys, and quizzes, creating a more engaging experience rather than just passively viewing the ad.

“Ensuring that these content ads are responsive and tailored to the device enhances their effectiveness and captures attention more effectively.”

LoopMe’s Upstone said banners still have a vital role to play and the constant evolution of the format into native, video, and other rich formats highlights why they have continued to be a staple for building strong brand messaging.

“However, if the last 30 years of advertising have been defined by internet, search, social, mobile and programmatic, the next 30 will likely be defined by one technology alone: AI,” he said.

“I’m excited to see how the industry will creatively harness this emergent tech and how older innovations such as banner ads can be further revolutionised by it.”

Lexlab's Gwynn said she is seeing renewed interest in display formats now with innovations like social display, shoppable video, and rich media executions.

"Even older style ads like desktop site skins are enjoying a renaissance now that advertisers can run across multiple publishers programmatically and with simplified creative requirements," she said.

"I think banner ads will continue to play a role in digital advertising, albeit with a much smaller slice of the digital spend compared to their halcyon days where they were the primary digital advertising option and probably accounted for 80+ cents in the dollar.

"The old school advertising rules of content is king, speak to your audience, and contextual relevance definitely apply to banner ads, and when done well they can be a really useful tool in building awareness - it shouldn't be about the click through rate."

The Pistol's Lee said the future of banner ads hinges on a critical assessment of their effectiveness based on actual consumer behaviour.

"We Are Social’s latest digital report uncovered that more than 30% of Australians use an ad blocker, so it’s clear that there is a negative sentiment towards digital banners," he said.

"Although significant effort has gone into ‘proving’ their value, questions remain about their true impact: do consumers even remember the banners they see? If not, how can they contribute to brand building or reinforce key messages? Do view-through conversion hold real weight, or are attribution models inflating their contribution?

"A lot of work has been put into innovative formats to combat this, with interactive and engaging formats. However even these often fall victim to banner blindness as users become more adept at filtering out anything that resembles an ad."

Lee said if a brand is lucky enough to benefit from high volumes of brand equity and simple yet distinct brand assets, then positive impact through the mere-exposure effect can be achieved - or perhaps a high volume retailer that can find value in reaching high-intent audiences through product-based retargeting or promotional messages.

"Having said that, my view, while somewhat critical, is that banner ads are losing relevance in today’s digital world," he said.

"They are increasingly perceived as ‘noise’, failing to engage consumers on an emotional level or create lasting connections with brands. Although somewhat anecdotal (and contentious, if you subscribe to subconscious branding principles), that I’m often challenging people on is, when was the last time a banner ad truly resonated with you? Better yet, what was the last banner ad you even remember seeing?"

Quantcast's Linahan said in a world where consumers are exposed to more content than ever, banners offer a cost-effective, highly scalable way to grow brand awareness and support performance-driven goals.

"They remain one of the most efficient and sustainable formats in terms of carbon footprint, particularly when compared to heavier ad formats like video, which require more data for file transfer," he said.

"This makes them an attractive option for advertisers looking to balance impact with environmental responsibility. The real challenge lies in proving the effectiveness of banner ads within the broader marketing mix. As digital advertising evolves, banners must demonstrate their value not just in driving performance metrics like clicks and conversions, but also in brand-building. 

"What’s essential moving forward is the continued integration of advanced technologies such as AI and programmatic buying, allowing advertisers to make banners more personalised, engaging, and targeted. I believe banner ads will continue to have a significant role in digital advertising, as part of a holistic strategy."

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