Banner Ads and How They Work

If you have spent any time surfing the web, chances are good that you have seen more than your fair share of banner ads. Banner Ads are small rectangular advertisements that appear on all sorts of Web pages.  They will vary considerably in appearance and subject matter, but they all share a basic function: if you click on the banner ad, your Internet browser will take you to the advertiser’s Web site.

What is a Banner Ad?

Banner ads range from relatively simple pieces of HTML code, to javascript code, to simple images, but their presence on the Web and their importance in Internet-based business is impossible to deny.

Over the past few years, most of us have heard about all the money being made on the Internet. The  internet has definitely changed the economy on a global scale and has brought many people and many companies a great deal of success. Companies make money when their advertising is successful and one of the most popular forms of Internet advertising is the banner ad.

A banner ad is similar to a traditional ad you would see in a printed publication such as a newspaper or magazine, but it has the added ability to bring a potential customer directly to the advertiser’s Web site with a single click.

Imagine touching a printed ad and being immediately teleported to the advertiser’s store! Like a magazine ad or newspaper ad, the banner stays in one place on a web site but it can present multiple images, include animation and change appearance in a number of other ways.

Sizes and Types of Banner Ads

Like print ads, banner ads come in a variety of shapes and sizes. The Internet Advertising Bureau (IAB) specifies eight different banner sizes, according to pixel dimensions. A pixel is the smallest unit of color used to make up images on a computer or television screen. The IAB’s standard banner sizes are:

• 486 x 60 Pixels (Full Banner)
• 392 x 72 Pixels (Full Banner with Vertical Navigation Bar)
• 234 x 60 Pixels (Half Banner)
• 120 x 240 Pixels (Vertical Banner)
• 125 x 125 Pixels (Square Button)
• 120 x 90 Pixels (Button 1)
• 120 x60 Pixels (Button 2)
• 88 x 31 Pixels (Micro Button)

The full banner (468 x 60) is by far the most popular, but you will see all these variations all over the Web. These are definitely not the only banner ad shapes and sizes but they are a good representation of the wide range of common banner ads. There is no universal file-size constraint for banner ads, but most Web sites set their own limits on memory size.

As you have probably noticed while surfing the Web, actual graphic content, or creative, varies considerably among banner ads. The simplest banner ads feature only one, static GIF or JPEG 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, video, or Java and Shockwave programming. These banner ads, which usually have larger file sizes, are often interactive beyond their simple linking function.

Banner Ad Objectives

There are basically two objectives an advertiser will have in mind:

• Action: This is when a visitor sees a banner ad and clicks the ad. They are then taken to the advertiser’s web site. From there, the visitor may make a purchase, subscribe to a list, request more info, or any other action.
• Branding: A visitor may see a banner ad but not click on it. The image and/or the message is simply being displayed to the visitor. Think about the number of times you have seen a tv commercial, a print ad, or a banner ad with a company logo or slogan. You may not run right out and buy that product or service but there may come a time in the future where you are looking for that product or service and the message you saw over and over again may influence you to do business with that company that ran the ads.

As you can see, there are a few different ways a banner ad can be successful. The next question becomes: How Do Advertisers Measure The Success of a Banner Ad? Advertisers look at:

• Page  Rotation:  This is when a banner ad is simply included throughout the publisher’s web site. Overall branding and exposure are the goals here.
• Clicks/Click-throughs: 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.
• Page views: Also called page 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. Although they don’t measure the effectiveness of a branding campaign, they do measure how many visitors were exposed to it. The most common way to sell banner ad space is cost per thousand impressions, or CPM (In roman numerals, M = 1,000).
• 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.

Who Makes Banner Ads?

Pretty much anybody with computer knowledge can learn how to make a very basic banner ad. To code the banner, simply combine the HTML tag for a link with the HTML tag for an image. You can create the necessary graphics using a simple computer graphics  program.

Basic, static banner ads are so simple you can make a few for your site in an afternoon, and animated GIF banner ads aren’t much more complicated. On the other end of the spectrum are complicated rich media ads. Ads with elaborate animation or user interactivity require much more extensive programming ability.

Amateur banner ads often work fine, but with so many ads competing for viewer attention, many Web sites need the help of professional ad designers. Good advertising agencies and professional designers not only bring their programming skills to banner ad creation, but also their creativity and extensive marketing experience. They work to match a banner ad campaign with the advertiser’s product or service, and to make innovative, attention-getting graphic content. There are many ad agencies and free-lance banner ad designers serving Web sites today, and they have a wide range of experience, ability and success. They also have a wide range of fees: You can get a professional banner ad for $50 or you can spend upwards of $1,000.

There are also Web sites that offer free banner ad creation. They either provide you with all the components you need to create your own banner ad, such as backgrounds and fonts, or they create a banner ad for you. These designers and companies do this for a number of reasons. Some simply make money from advertising on their sites, some offer free banner creation in exchange for their customers posting client banner ads on the customer’s site and a few designers simply create banners as a hobby.

Like most forms of advertising, banner ads vary considerably in quality because their creators vary a great deal in ability and experience. The range is even greater with banner ads than with most other forms, however, because it is so easy and inexpensive to create and post banners.

Advertising with Banners

An advertiser that is interested in posting banner ads on other sites has four basic options. The advertiser can:

• Arrange to display other Web sites’ banner ads in exchange for them displaying its ad.
• Pay publisher sites like www.TheOnlineAdNetwork.com to post its banner.
• Pay an organization to post the banner on a number of publisher sites.

These three arrangements take many forms and advertisers and publishers must choose the specific arrangement that best suits them.

Buying Banner Advertising

If you are interested in buying advertising space, you have a few different options. You can:

• Approach Web sites yourself – This is an involved, time-consuming way to place your banner ads, but it does offer some significant advantages. Mainly, placing all your banner ads yourself gives you a lot of control over how you advertise. You can fully investigate potential publisher sites to decide if their content matches yours and you can often work with the site to find the best location for your ad. This can be a relatively inexpensive way of advertising, if you target small Web sites that don’t attract a lot of other advertisers. If you choose such sites carefully, your banner ad can be fairly effective. A small Web site that caters to a particular niche may not have very high traffic, but the people who do visit are all interested in some of the same things. If you sell rare PEZ machines, for example, a well-placed ad on a small toy collector site could bring you significant traffic.To place advertisements this way, you have to approach each site individually, follow its particular procedures and purchase its particular advertising packages. Start by searching the site to see if they have a page for potential advertisers. If you can’t find anything online, call the site or send them e-mail. Shop around for an advertising arrangement that meets your needs and fits your budget.
• Employ an advertising agency – A full-service advertising agency will do most of the work of posting banner ads for you, and it will lend its expertise to the process. Agencies help you seek out suitable publisher sites, they negotiate the price of banner ad space, and they help you make the best use of your advertising budget. Additionally, advertising agencies work with you to conceive advertising campaigns and they create professional banner ads for your site. They can often get a better price on advertising space because they have a lot of clients and can buy impressions in bulk. There are many good Internet advertising agencies, offering a wide variety of special services.It’s clear that using an advertising agency has a lot of advantages, but it also has one significant drawback for smaller sites: Advertising agencies usually deal only with accounts of a certain minimum size. Agencies vary considerably in reputation, services offered and size, and so also vary a great deal in price and account minimum. The best way to find out if an ad agency is right for you is to shop around. Find out what an agency offers, how much it charges and how much experience it has. Look at several agencies so you can make an informed decision.The cost of using an agency is certainly worth it to very large companies because they need the expertise and talent of professionals to make their ads competitive with rival companies’ ads. It may be a necessary investment for a smaller Web site too, if it wants to establish itself as a significant presence on the Internet. Advertising is a very difficult process and an important ad campaign is certainly best handled by experts. If you have a limited advertising budget, however, you might do better to spend most of your money on actual banner ad placement, rather than marketing plans and top-of-the-line banner design.
• Join an advertising network – If you want to place your banner ads on a lot of sites and/or get a lot of broad exposure but don’t want to put in the time to negotiate with  a number of individual sites yourself, then using an advertising network is a good option. Advertising networks simply act as brokers between advertisers and publishers. They take care of placing an advertiser’s banner ads and tracking all activity related to that ad. They also share one of the main drawbacks of banner exchange programs, however — a lack of client control. The advertising networks decide where to place banner ads, and they may not be able to give each client the level of attention a larger advertising agency would. Consequently, there’s a good chance you won’t always be happy with where your banner ad gets displayed. Many Web sites happily accept this shortcoming in light of the extensive services ad networks provide at a relatively low cost.

Selling Banner Advertising

If your web site has good traffic, you may want to sell banner advertising to make your site more profitable. You can also become a banner ad reseller for other web sites that offer banner advertising.

What Makes Banner Ads 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 Web site puts a banner ad up and monitors the results it gets. If that doesn’t work, the site tries something else. What makes a good advertisement is largely a mystery.

That said, there are a few qualities that generally make for more effective banner ads in many situations. If you are mounting a banner ad campaign you should keep these suggestions in mind:

• Post banner ads on pages with related Web content — the more related, the better.
• Advertise a particular product or service in your banner.
• If you do advertise a particular product or service, link the banner ad to that part of your Web site, rather than your home page.
• Use simple messages rather than complicated ones.
• Use animated ads rather than static ones.
• Your graphic content should pique visitor curiosity.

The most important things are to make visually appealing banner ads with interesting content and to intelligently place the ads so they are exposed to audiences that would be interested in them. Combining these qualities is a simple notion, but effectively accomplishing this is a complicated art. And like any art, advertising is constantly evolving. New approaches to banner ads pop up all the time.

The Future of Internet Advertising

If you keep an eye on Internet news, you will continually see stories about the death of the banner ad, as well as stories about upturns in banner ad success. Banner ads will most likely be around for some time and will, no doubt constantly evolve. Advertising is the main source of revenue the keeps commercial Web sites going, you can be sure internet advertising will continue to evolve over time.