What is Banner Advertising and Does it Work?

If you've spent any time browsing the Internet, you are sure to have seen banner ads. These small rectangular advertisements appear on a variety of Web pages and vary in appearance and subject matter, but they all share a basic function: if you click on them, your Internet browser will take you to the advertiser's website.

But how do they work and why are they there?

This new medium of education and entertainment has revolutionised the economy and brought many people and many companies a great deal of success. But where is all this money coming from? There are a number of ways websites make money, but one of the main sources of revenue is advertising. And one of the most popular forms of Internet advertising is the banner ad. A banner ad is simply a special sort of hypertext link. A bit of HTML code instructs a web server to bring up a particular web page when a user clicks on a certain piece of text. Banner ads are essentially the same thing, except that instead of text, the link is displayed as a box containing graphics (usually with textual elements) and sometimes animation. Because of its graphic element, a banner ad is somewhat similar to a traditional ad you would see in a newspaper or magazine, but it has the added ability to bring a potential customer directly to the advertiser's web site. Imagine touching a printed ad and being immediately teleported to the advertiser's store! A banner ad also differs from a print ad in its dynamic capability. It stays in one place on a page, like a magazine ad, but it can present multiple images, include animation and change appearance in a number of other ways.


Types of Banner Ads 

Like print ads, banner ads come in a variety of shapes and sizes. The full banner (468 x 60) is by far the most popular, but you will see different variations all over the Web. It is important to be wary of the size so it minimises load times for your site. As you've probably noticed whilst surfing the web, actual graphic content, or creative, varies considerably among banner ads. The simplest banner ads feature only one image, which is linked to the advertiser's home page. More common is the GIF-animated banner ad, which displays several different images in succession, sometimes to create the effect of animated motion. Then there are rich media banner ads - ads that use audio and video. These banner ads, which usually have larger file sizes, are often interactive beyond their simple linking function.


Banner Ad Objectives

Advertisers generally hope a banner ad will do one of two things. Ideally a visitor to their site. In this case the banner ad has brought the advertiser a visitor they would not have had otherwise. The banner ad is a real success if the visitor not only comes to the site but also converts. Failing a click-through, advertisers hope that a publisher site visitor will achieve brand association. This could mean the visitor consciously notes the content of a banner ad and decides to visit the advertiser's site at some time in the future, or is made aware of the advertiser's product or service. This second effect of advertising is known as branding. We've all experienced the effects of branding before. Not necessarily a hard sale but just informative on the product which may be crucial in the buying process.


So there are several ways a banner ad can be successful. Consequently, there is several ways advertisers measure banner ad success. Advertisers look at:


  • Clicks: The number of visitors who click on the banner ad linking to the advertiser's Web site. Publisher sites often sell banner ad space on a cost-per-click (CPC) basis.
  • Impressions: This is the number of times a particular web page has been requested from the server. Advertisers are interested in page views because they indicate the number of visitors who could have seen the banner ad.
  • Click-through rate (CTR): This describes the ratio of page views to clicks. It is expressed as the percentage of total visitors to a particular page who actually clicked on the banner ad. The typical click-through-rate is something under 1 percent, and click-through rates significantly higher than that are very rare.
  • Cost per sale: This is the measure of how much advertising money is spent on making one sale. Advertisers use different means to calculate this, depending on the ad and the product or service. Many advertisers keep track of visitor activity using Internet cookies. This technology allows the site to combine shopping history with information about how the visitor originally came to the site.

Different measures are more important to different advertisers, but most advertisers consider all of these elements when judging the effectiveness of a banner ad.

What Makes a Banner Ad Effective?

There are no concrete rules about what makes a good banner ad. As in all advertising, an effective banner ad is the product of a number of different factors, and there is no sure way to predict how well any banner ad will do. A lot of successful banner ads are the result of extensive trial and error experimentation: A website puts a banner ad up and monitors the response it gets. If that doesn't work, the site tries something else. The most important things are to make visually appealing ads with interesting content and to intelligently place the ads so they are exposed to audiences that would be interested in them. New approaches to banner ads pop up all the time. Banner ads can be targeted and ads that are targeted appear based on the Internet user's activity. For example, advertisers can buy keyword advertising on a search engine so that their ads are displayed when someone performs a particular search. If an advertiser buys up keywords related to its product or service, it can probably increase click-through rates, because the visitor has already demonstrated an interest in finding sites on that particular subject.

Google is testing banner ads on web search results - renegotiating on a 2005 promise that "there will be no banner ads on the Google homepage or web search results page… Ever." The company confirmed that it is testing a system with about 30 advertisers in the US in which it shows banner ads for companies on pages, which include them in web search results.

The most important question is always:  do they work?

The answer depends on many factors such as creative, targeting the right audience and advertising on the right websites. But ultimately, when done right, banner ads are an effective way to reach your target audience. And reaching the right audience, in the right context, with the right creative, can make for an incredibly successful digital campaign. To help you better understand why banner ads are an effective method of advertising, here’s 5 reasons why banner ads work:

  • The majority of advertising exposure occurs when the audience's attention is focused elsewhere, such as while browsing a web site. Regardless of measured click-through rates, banner ads still create a favorable attitude toward the ad due to repeated exposure.
  • Sources say banner ad CTRs average at 0.07%. TV response rate is 0.05%. Outdoor has a 0.03% response rate. Radio, which lacks the visual component of the other three media, has a response rate of 0.13%.
  • Banner ads have the ability to hyper-target by age, lifestyle, and geography better than most other mediums. 
  • Video and display advertising are effective at driving a significant lift in site visitation and SEO, even in the face of minimal clicks on ads.

It’s all about ROI.  Marketers continue to pour billions into banner ads due the sheer scale and efficiency.  Low CPMs, compared to other media, mean that marketers can afford a high volume of impressions at a relatively low cost.

By Content Assistant - Jack Cooper - @Coop_ATTACK

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