Banner advertisement is perhaps the oldest and most common mode of advertisement in the WWW. In its simplest form - it acts like a billboard, spreading a promotional message and helping interested visitors to jump to relevant web-site.
Difference between a physical billboard and on-line banner advertisement lies in ability of the later to measure campaign effectiveness. Unlike traditional ad media like TV or print where measuring audience response is difficult - its possible to obtain clear and accurate measurements of success or failure of on-line ads through web traffic analysis.
How good is banner advertisement for your business ? Should you adopt this known and trusted method or go for new ones like search engine based PPC ? The answer lies in your requirement and an understanding of what banner advertisement can deliver.
Let us discuss various concepts associated with on-line advertisement and analyze how banner advertisement works.
What Kind of On-Line Advertisement Suits my Business ?
There are three major reasons for creating online advertising campaign. These are:
Key Concepts Associated with On-Line Advertisement
Before proceeding any further, it is important to understand a few key concepts associated with on-line advertisements in general and banner advertisement in particular.
Impression is a measure of how many times an ad has been viewed. How many people have viewed a banner ad or received an "impression" by seeing the ad - is a measurement of responses from the ad delivery system. Once a visitor has viewed a banner on a web page - an impression is recorded. Banner views are different from page views in the sense that there may be multiple banner views within one page view. There's another distinction between page view and banner view - some banner serving software do not count a banner view unless the visitor stays on the page long enough for the banner to be fully downloaded from ad server.
CPM refers to cost per thousand (M here stands for 'Mille' - the Roman numeral used to represent 1000). CPM is commonly used by the advertising industry to describe how many people have viewed the banner ad (ad view) or received an "impression" by seeing the ad. In other words, this is the price an advertiser pays for displaying his/her banner 1,000 times.
For example, an advertising rate of $10 CPM, means the advertiser is paying $10 for every 1,000 impressions, or $0.01 for each banner impression.
CTR or Click-Through
When a visitor gets interested in promotional message of a banner, he/she clicks on it to learn more and is automatically transported to advertiser's website. Every time someone clicks on the banner, it is called a "click- through," and the "click-through rate" is expressed in terms of percentage of users who click on an advertisement (i.e. ratio of ad clicks to ad impressions). In other words, click through ratio is an indication of a banner's effectiveness.
How Advertiser Pays for Banner Advertisement
Universally, there are two modes of payment for banner ad -
Typically, special server-based software called 'ad-server' rotates banner ads in specified places of a web-site. It also keep track of impressions, click-thorough and other vital statistics.
In CPM mode of payment - advertiser pays for number of impressions based on an agreed CPM. For example, if a site charges US$ 9 per CPM - for $450 the advertiser gets $450 / $9 CPM * 1000 = 50,000 impressions
If percentage of click thorough is 2 - 4%, advertiser may expect ~ 1000 - 2000 new customers visiting his/her web-site. This is apart from brand building based on number of impressions.
In Click-Through mode - Advertisers pays a fixed fee for every click, no matter what is the number of impressions.
In time-based banner advertisements (typical in India), advertiser pays a fixed fee based on monthly or quarterly rate, irrespective of the number of impression or click-thorough.
Types of Banners Advertisements
Traditional banner ads were static in nature - usually a .gif or .jpeg image file. With technology advancing - new modes of banner ads appeared in ad scene. Following are some of the popular modes of non-static banner ads
Checklist for Banner Designers
Here's a few things to keep in mind while creating banner ad
Lack of targeting and visitor apathy are two major drawbacks of banner ad campaigns. Because of large scale use or misuse - visitors today treat banners as necessary evil and pay little attention. Click through rate of banner ads are much lower compared to other forms of on-line advertisement such as targeted search engine marketing. However, banner ads are more effective in brand building and work very well when the creative is attractive and ad delivery systems can do some targeting.
Happy and Productive Surfing
Dr. Amit K Chatterjee
FAIDA - Newsletter on Business Opportunties from India and Abroad
Vol: 6, Issue 32
; May 27' 2006