As Wikipedia describes it – “Banner blindness is a phenomenon in web usability where visitors on a website ignore banner-like information.” As Jakob Nielsen mentions, “Users almost never look at anything that looks like an advertisement, whether or not it’s actually an ad.”

The term “banner blindness” was coined by Benway and Lane (1998). It was a result of website usability tests where major test participants, consciously or unconsciously, ignored information that was presented in banner or looked like a banner.

This eye-tracking study by Jakob Nielsen has confirmed that most of the time, the banner blindness is real. Users are now ‘immune’ to these ethical and now-ethical ways of advertising on the web and tend to ignore those ads or something that looks like an advertisement and rather keep looking relevant information in the form of links, etc, while ignoring large animated or colorful elements like graphics.

Also, users generally read the whole content; rather they do scan the content. If the content is interesting for the user, then he might choose to read it in-depth. But, in all such cases, he still may prefer not to see those noticeable banners.

Source: Banner Blindness: Old and New Findings
(Jakob Nielsen’s Alertbox, August 20, 2007)

Heatmaps from eyetracking studies:
The areas where users looked the most are colored red; the yellow areas indicate fewer views, followed by the least-viewed blue areas. Gray areas didn’t attract any fixations. Green boxes were drawn on top of the images after the study to highlight the advertisements.
© 2007 by Jakob Nielsen.

References / Resources:

Benway, J. P., Lane, D. M.,
Banner Blindness: Web Searchers Often Miss ‘Obvious’ Links
1998, Internet Technical Group, Rice University

Norman, D. A., Commentary:
Banner Blindness, Human Cognition and Web Design
1999, Internet Technical Group

Pagendarm, M., Schaumburg, H.,
Why Are Users Banner-Blind? The Impact of Navigation Style on the Perception of Web Banners,
2001, Journal of Digital Information

Why Are Users Banner-Blind?
Journal of Digital Information (July 31, 2001)

Just How ‘Blind’ Are We to Advertising Banners on the Web?
Usability News (Summer 2000)

Please submit resources / insights for Banner Blindness here, if you have any.