The traditional wisdom is that half of your ad budget is wasted, but you can't tell which half. Recent studies in ad avoidance, interaction and recall seem to be getting us closer to at least working out which formats and media are least wasteful.
TV, for a start. According to Adverlab, BigResearch's latest study shows that just 5.5% of TV viewers regularly pay full attention during commercial breaks. We've known ever since the National Grid started reporting power surges during commercial breaks for major TV events that people were leaving the room to make tea rather than watching the ads, but it's interesting to see the extent to which people actually pay attention quantified.
Banner ads seem to fare even worse. "Banner blindness" is a well-known phenomenon, especially amongst long-term Internet users, but an old AOL study found that 99% of website visitors do not click on an ad in a given month; that the majority of the remaining 1% that do, do so only once; leaving two-tenths of 1% of visitors to click more often, and the study did not have any happy news about the demographic desirability of this group to advertisers:
"Who are these "heavy clickers"? They are predominantly female, indexing at a rate almost double the male population. They are older. They are predominantly Midwesterners, with some concentrations in Mid-Atlantic States and in New England. What kinds of content do they like to view when they are on the Web? Not surprisingly, they look at sweepstakes far more than any other kind of content. Yes, these are the same people that tend to open direct mail and love to talk to telemarketers."
Last week a new survey from Burst Media (pdf, HT Paidcontent) showed that in-stream video ads are such a turn-off for people that more than half of them stop watching a video as soon as they see an ad and 15% leave the site as soon as they see an ad. And yet even this level of avoidance seems superficially far better than that for banners or TV advertising. If you want your ad to not be simply ignored, perhaps in-stream online video is currently the way to go.
So the news that ad-funded MVNO Blyk denies that users are simply shutting off their messaging service to avoid the ads should come as no surprise; nor should the ongoing troubles of ad-supported music ventures SpiralFrog and Qtrax. Most ads don't work because most people avoid or ignore them. If there's a way of avoiding the Blyk ads, people will be using it. Qtrax was supposed to launch in a blaze of publicity today: by mid-afternoon (London time) it seems that the claimed deal with the music labels may not exist. This is probably not the fault of Qtrax - as my friend Brendan Cooper says, music distribution innovations are often stymied by "a music industry that cannot get its head around the opportunities afforded by online music distribution". But in another sense it's no surprise that an ad-supported model for either music or telephony isn't working. Most ads don't work. If you're only wasting half your ad budget, you're pulling off some sort of miracle.
Update: Jim Connelly at Medialoper nails the problem with Qtrax: "if they actually had 25,000,000 songs, I might be persuaded to ignore their advertising in order to get some obscurity from the 1980s which still hasn’t ever been officially digitized" (my italics). Indeed.