Banner ads are the pioneers of internet marketing. The first banner ad appeared on http://www.hotwired.com (now http://www.wired.com) on October 27, 1994 in the form of an AT&T advertisement. Since then, banner ads have taken over the internet in a variety of forms.
A banner ad is a graphical promotion used on websites as a form of advertisement. Banner ads can be any size you want, however the accepted standard is 468 pixels wide by 60 pixels high. Due to the wide acceptance of this size, the same banner ad can be used on most websites without having to reconfigure the size and layout. Although banner ads can be used to advertise your phone number, address, or anything else you want, the real purpose behind banner ads is to get someone to click on it and go to your website.
There is a lot of controversy about the effectiveness of banners. Some people use them, others use them, saying that they are useless. While click-through rates have been steadily dropping, the same can be said for ad pricing. The average click-through rate is in the 0.5% range for banner ads. However, with good banner design and placement, it is still possible to achieve a good return on investment by combining below-average ad rates and above-average response rates.
Banner ads are sold in three ways: cost per 1,000 impressions (CPM), pay-per-click (PPC), or pay-per-action (PPA).
Buying a PPC banner is usually more expensive than CPM based, but it can be much more effective because people actually take some type of action when they click on your site. One of the drawbacks of PPC banner advertising is that a person can click on an ad more than once and get charged for each click. However, some ad providers track the IP address and only charge one click per computer per day. However, most places don’t do this for the simple reason that it means less money in your pocket.
The effectiveness of cost-per-impression banners can vary quite a bit, depending on where they are placed on the webpage, and generally (not always) pays the same whether the banner is displayed prominently at the top of the page or It is hidden in a lower corner. Most CPM banner sites rotate banners on the whole site (Run of Site – ROS) and on the whole page. Banner ads to reach the general public are typically priced from $1-$10 CPM, while targeted sites can get CPM rates of $30-$50 or more. Although it may not sound like much, banner ads can be quite expensive. Do accounts with me:
If you’re paying $10 CPM and the click-through rate is an industry average of 0.5%, then it costs you $10 to attract 5 people to your site, or $2 per person. If 2% of your site visitors make a purchase, then your customer acquisition cost (CAC) is $100, ($2 / 2%). That means for every transaction you make, you have to pay $100 in advertising fees. Some websites don’t even manage to convert 2% of visitors to customers, especially when they originate from a banner ad.
For banner ads to be effective, you need to combine above-average click-through rates with below-average banner prices and sell a high-priced product, a high-margin product (such as an information product), or Have a strong back-end in place so you make money on your second, third, fourth, and even 20th sale.
Pay-per-action banners are usually the most expensive, as you only pay for one desired action. This can be a product sale, getting someone to sign up for an email list, or any other action you want. PPA banners can be very similar to an affiliate program and use the same type of tracking.
banner exchanges
Like link exchanges, some companies have banner exchange programs. Most banner exchange programs are free and some may require you to pay a monthly administration fee so they can cover their costs.
Many of the free companies make money from the disproportionate proportion of banners they display on their site, compared to banner ads. your banners are displayed on other sites. Let’s say you need to place a certain banner on your site for a total of 10,000 impressions, but in return you only get 8,000 impressions of your banner on someone else’s site. This is how these sites finance themselves. They sell the extra 2,000 impressions you lose, for a profit.
Some banner exchanges are simple and straightforward; I will put your banner on my site, if you put mine on yours. There is absolutely nothing wrong with this if both sites have similar interest and get comparatively the same amount of traffic.
Some sites will track your stats and others will allow you to upload multiple banners so they can be rotated on the sites where they are placed. This way, you can determine what works best if you pay per impression. It’s always a good idea to use your own ad tracker so you can track clicks to your site and see how many actually lead to a sale.
Some banner exchange companies will actually design the banner for you as part of their program. Although I suggest you design, (or have designed) your own banners. If you’re going to let the banner exchange company design it for you, make sure they’re on target. Some of these companies use software that automatically creates their banner without human hands or human eyes touching it, until it reaches yours. As with any type of advertising, your banner design, wording and call to action are very important.
Since the purpose of a banner is to stop, really interrupt, the surfer’s train of thought, clicking on a banner is an impulsive decision. People need a reason to make an impulsive decision, so you need to give it to them. Here are some tips to help generate the highest click-through rate possible:
– Have a call to action. Always say “click here” on your banner, or some variation of it. I know this sounds overly simple, but it is often overlooked and can easily double your click-through rates.
– Add a button. Placing the words “click here” on a real or obvious button in your banner improves response.
– There is no room for subtlety in banners. Your banner should scream your message.
– Try asking questions: “Do you want to save 15% on your car insurance in 15 minutes?” Questions work better than statements, especially when used to provoke the audience. Studies have shown that by changing a statement to a question, you can increase your click-through rate by 16%.
– If appropriate, use humor. Make sure it’s fun and get other people’s opinions first. Very often, something that may be funny to you, other people may not understand.
– Use bright primary colors. The bright colors attract the eyes of the visitors. Blue, green and yellow cause the most clicks. Stay away from transparent colors, whether in the foreground or background; they tend to get lost among the colors on most websites, so stick with the solids.
– Use simple animation. Moving images and flickering animation draw visitors to your banner. The strategic use of movement captures attention more effectively than static banners. Don’t make them too wild or complicated so that the message is lost, the senses are overloaded, and/or the file size is too large.
– Offer a reward or gift when someone clicks on your banner. It will help motivate people to click. Contests work well too, especially if you’re giving away money. Money is the biggest motivator.
– Run a series of banners. It may take more than one message to tell your story or to go after a particular market. Run a series of banners and vary your message. Keep your message consistent and engaging so that your visitors want to keep reading. After the fourth printing of the same banner, most people tend to unconsciously block it in their mind.
– Keep the copy short. Think about billboard advertising: the average person spends six seconds looking at a billboard, and you spend less than a third of that time on the web. Write compelling copy. Use action words that motivate.
– Use italics if you can. While they don’t have a huge impact, they can increase click-through rates by a few percentage points compared to standard fonts.
– Create curiosity. A large number of those who click on ads do so out of curiosity. Studies show that curious clicks are very broad by demographic and other characteristics, so curiosity-based targeting can be very effective when you have a product or service of general interest.
– Use wide banners or tall skyscraper banners. They are clicked on significantly more than smaller, skinny, or square banners.
– Make your banner file size small, so it loads fast; 10-30kb is typical for a 468 by 60 pixel banner.
Some Tips for Implementing Banner Ad Campaigns
First, determine if you think a banner ad campaign would be worth participating in. Consider banner banner costs, compared to an average click-through rate of half a percent, your sites conversion rate, profit margins, and customer LOV (Lifetime Value).
Determine where and on which sites you want to consider placing your banner ads, taking into account cost, banner placement, payment types (PPC, CPM, PPA), and whether or not it’s site specific. Find some websites that complement yours.
Contact the site you want to place your ad on and ask if they have a rate card and learn about their payment options. You can also see if they offer special deals or discounts if you buy in bulk, or even just ask for a better deal. Many times they will give you one simply because you asked for it.
Read the submission guidelines. This usually covers things like:
– Maximum file size
– Accepted file types (commonly .gif, .jpg and flash – .swf)
– Accepted banner sizes
– Submission and review deadlines
– How many banners can you send for rotating campaigns? How often do the billboards rotate?
– How do you determine where your banner is placed on each page?
– Do you pay per placement or is it random?
Keep track of all your banner statistics. Although the company you advertise with can do this for you, it’s also a good idea to follow up yourself. This way, you can track and determine results like your conversion rate, ROI, CPC (cost per click), and click-through rate for each banner.
Overall, banner advertising can be a key part of your online marketing campaign. Depending on all the key factors mentioned above, it may or may not be a financially feasible part of your marketing campaign, if you can turn a profit. If you can’t, don’t worry, there are plenty of other ways to profitably market your business online.