Globally, CTR on ad banners has decreased from 2.5 per cent in the mid-1990's to 0.36 percent during March 2000, according to research by Nielsen Netratings. Falling CTRs also mean that advertisers will have to work at better and optimal ways of using the Web as a medium of reaching their customers.

There has been another fallout of the fall in CTRs. The average price per 1,000 online ad "impressions" - that is, each banner placed on a Web page - is falling. This combined with the increase in the number of Websites is not making things easier. It's a simple example of supply and demand ... many more sites are seeking advertising, so there's a lot more to choose from."

So why are people not clicking on banner ads? The newly-initiated Web visitor is online more for fun. But after surfing around for a few weeks, he settles down to a few sites. This mature visitor then logs on to the Net with a specific purpose in mind and is not interested in banner ads. In fact, the animated banner ads are an irritating factor to the Web user who is trying to get things done.

The mindset of a Web visitor is completely different from that of a TV viewer. A TV viewer is passive and will generally take what is thrown at him. However a Netizen is an active and empowered user and has the choice to ignore the banner ads. And that's exactly what is happening. It is now upto the advertisers and the portals to see how get this highly intelligent Netizen to click on banner ads.

One school of thought suggests that increased use of online ad space in brand-building campaigns may be contributing to the fall in click-through rates. Such banner ads typically seek to put a product's name in front of a consumer and do not necessarily draw the kind of clicks craved by results-oriented direct marketers.

Another factor contributing to the declining click-through rate could be the move by some publishers to sell previously unsold space at below-market rates. Mostly undesirable ad space, unlikely to generate high click-through rates, is being added to the Web ad totals and is dragging down overall click performance.

Some executives said declining click-through merely reflects the industry's explosive growth, which has attracted new ad executives who still have little experience in placing and targeting online ads effectively.

But the debate still rages on. Advertisers say they are demanding lower prices, as it is tough to measure the online ads' effectiveness. Web publishers contend that banner ads promote a company's brand whether consumers act on the ad or not, but advertisers often are more interested in how many viewers clicked on an ad to learn more (the "click through" rate) or who actually bought one of the advertiser's products.

One thing that is clear is that Web advertising by itself will not succeed. It has to part of an integrated marketing campaign. The other media creates an emotional appeal for the customer and keeps the brand top of mind. Then when the customer spots an ad online, he is more likely to click on it. The Web then should be used to close the loop with the customer i.e. it should be place to seal the bond with the brand or make a sale. On the Web the customer should also be rewarded for revealing personal information.

The moral of the CTR experience? Use the Web to get results and not for exposure, which can be better achieved through traditional media.