Banner ads continue to dominate the mobile advertising format despite widespread criticism because: 1) The open mobile advertising supply chain has been slow to support new formats due to its complexity. 2) Closed ecosystems found in companies like Facebook are more flexible but publishers and marketers must balance relying too heavily on any single company. 3) Progress is being made towards native advertising but it still only accounts for around 25% of display ad spending according to projections.

2. #APPNEXUSSUMMIT
WTF: Why Do Banner
Ads Still Exist in Mobile?
Arel Lidow, VP, Product Management, AppNexus

3. #APPNEXUSSUMMIT
No One Seems to Like Banner Ads These Days
“…one of the most
misguided and
destructive technologies
of the Internet age.”
- FARHAD MANJOO
“Fall of the Banner Ad: The Monster that Swallowed
the Web”, Farhad Manjoo, NY Times, Nov 5, 2014
“Yes. Internet advertising
suffering horribly by
premature format
standardization. Has been
rolling fiasco for 2 decades.”
- MARC ANDREESSEN
“Marc Andreessen: Ad Tech has fueled a ‘race to the
bottom’,” Brian Morrissey, Digiday, Feb 5, 2014
“We messed up when we decided
banner ads would be how we make
money on the Web.”
- JOHN BATTELLE
“’CHANGE OR DIE’: Why Federated Media Has to Reinvent Online
Advertising All Over Again”, Alyson Shontell, Business Insider, Nov 23, 2012
"How do you reimagine things, and bring back
catchy, engaging advertising?" says Peretti. "You
can't really do it in banners because there's no
space. But you can do it if you give people a full
post or a bigger canvas to work with.”
- JONAH PERETTI
“INSIDE BUZZFEED: The Story Of How Jonah Peretti Built The Web’s Most Beloved New
Media Brand”, Alyson Shontell, Business Insider, December 11, 2012
“It’s almost like a prank that was
played by the technology industry
on the media industry 20 years ago.”
- CHRIS DIXON
“Fall of the Banner Ad: The Monster that Swallowed the Web”, Farhad
Manjoo, NY Times, Nov 5, 2014

4. #APPNEXUSSUMMIT
Mobile Publishers Especially Dislike Banner Ads
“Meanwhile, STEVEN SORDELLO,
CHIEF FINANCIAL OFFICER AT
LINKEDIN – said their business had
witnessed a 30% year-on-year decline
in traditional display-ad revenue. As a
result, they will shift away from this
offering and towards sponsored ads in a
plight to boost annual subscriptions.”
“We believe that eliminating brand advertising,
which we also refer to as our display
advertising product, will benefit the company
over the long term," said YELP FOUNDER
AND CEO JEREMY STOPPELMAN. "The
industry trend toward increasingly disruptive
display advertising is at odds with our focus on
the consumer experience, particularly within
[our mobile] app.”
“The mobile banner might be the
worst ad since the popup. We
killed that thing because it was awful.
The mobile banner is just as bad.”
DAVID JAKUBOWSKI, FACEBOOK
“Yelp, LinkedIn shift resources from old-fashioned display ads”, Jennifer
Booton, MarketWatch, Aug 4, 2015
“Yelp: Display Advertising Will Be 'Discontinued' by End of Year”, George
Slefo, AdAge, July 28, 2015
“Facebook Head of Ad Tech: Five Marketing Opportunities Not to
Miss Out On”, Business Zone UK, Nov 9, 2015

5. #APPNEXUSSUMMIT
And Yet, Banner Ads Are STILL Everywhere

6. #APPNEXUSSUMMIT
Native is a Small Minority of the Display Ecosystem
Source: Socinetel 360 as Cited in Company Blog, Sept 1, 2014 (eMarketer)
Source: eMarketer Sept 2015
18% 20% 22% 24%
27%
2014 2015 2016 2017 2018
Native Ad Spend
Other Display Ad Spend

7. #APPNEXUSSUMMIT
WTF? WHY ARE
BANNER ADS
still
FORMAT?
THE DOMINANT

8. #APPNEXUSSUMMIT
hasn’t native
advertising completely
replaced banners?
WHY
4 Blame it on consumers
Blame it on XXX
Blame it on XXX
Text “PUBSUMMIT” to 22333
1
2
3
4
Publishers have been slow to adapt sites
and apps to new formats
DSPs, SSPs, and Ad Servers have been slow
to support new formats.
Banner ads are still the preferred format of
Marketers & Agencies
Something else…

9. #APPNEXUSSUMMIT
It’s All About Supply Chain

10. #APPNEXUSSUMMIT
The “Open Ecosystem”
TRADING
DESK
PUBLISHER
SALES
MARKETER
PYM
AdOps
FORECASTING
PUB AD SERVEROMS
SITE/APP
CREATIVE
AGENCY
RICH MEDIA
VENDOR
MEDIA AGENCY
VIEWABILITY VENDOR
AGENCY AD SERVER
VERIFICATION VENDOR
RFP PROCESS

11. #APPNEXUSSUMMIT
The Benefits
of the Open Ecosystem
FAIRNESS CONTROL MODULARITY TRANSPARENCY

12. #APPNEXUSSUMMIT
12
The Achilles Heel
of the Open Ecosystem
But the Open Ecosystem
Cannot Easily Adapt
to New Formats

13. #APPNEXUSSUMMIT
Closed Ecosystems are More Flexible
AGENCIES
3RD PARTY
PUBLISHERS
3RD PARTY
PUBLISHERS
3RD PARTY
PUBLISHERS
MARKETER

14. #APPNEXUSSUMMIT
So what does this
mean for you?

15. #APPNEXUSSUMMIT
Be careful and do not put all
of your eggs in one basket
PUBLISHERMARKETER

16. #APPNEXUSSUMMIT
Keep the path to Open

17. #APPNEXUSSUMMIT
PUBLISHERMARKETER

18. #APPNEXUSSUMMIT
WTF Why Do Banner Ads
Still Exist In Mobile?

19. #APPNEXUSSUMMIT
Thank you!