This is sure to continue for a few more years, but at the same time, pressure will mount to lower customer acquisition costs. Already, we are seeing retailers feeling a chill wind depressing their stocks, largely over the question of whether they can bring acquisition costs below the lifetime value of those customers. As a result, retailers are demanding to be able to measure ROI for their advertising. And the true measure of ROI for a retailer is not how many people click on an ad, but how many go on to make a purchase. Closed-loop tracking will become the norm, not something done for special campaigns.
Retailers say no to banners for two reasons.
The first is that they re not terribly effective at selling product, and are therefore expensive. That makes them very risky. Somehow, online advertising needs to accommodate retailers need to get results from all of their marketing dollars. Such are the forces that will shape the evolution of online advertising and which will determine the future of the ad banner. The dawning of the Age of e-commerce presents an enormous opportunity to the existing ad networks and major portals as well as to new entrants into the market.