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Banner Ads

Article written by Tom Harris, © 2005 HowStuffWorks, Inc.

If you've spent any time surfing the Internet, you've seen more than your fair share of banner ads. These small rectangular advertisements appear on all sorts of Web pages and vary considerably 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 Web site. But how do they work and why are they there?

Banner ads are usually relatively simple pieces of HTML code, but their presence on the Web and their importance in Internet-based business is immense. In this edition of How Stuff Works, we'll examine banner ads and their place on the Internet. We'll see how they work, how advertisers rate their effectiveness, and how you can use them to advertise your site or bring in revenue. We'll also examine the technology behind them and look at some of the different forms they can take. By the end of this article, you will be a banner ad expert!

What is a Banner Ad?

Over the past few years, most of us have heard about all the money being made on the Internet. This new medium of education and entertainment has revolutionized 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 lot of ways Web sites 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 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. This is something like 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 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:

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 not the only banner ad shapes and sizes, either, but they are a good representation of the range of common banner ads. There is no universal file-size constraint for banner ads, but most Web sites impose their own limits on memory size, usually something like 12K to 16K. This is because banner ads add to the total file size of the page they appear on, therefore increasing the time it takes for a browser to load that page.

As you've 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

Advertisers generally hope a banner ad will do one of two things. Ideally, a visitor to the publisher site, the Web site that posts the banner ad, will click on the banner ad and go to the advertiser's Web 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 buys something. Failing a click-through, advertisers hope that a publisher site visitor will see the banner ad and will somehow register it in their heads. 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 it might mean that the visitor only peripherally picks up on the ad but 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. Say you see ads on television for Brand X glue all the time. The ads don't seem to particularly affect you -- you don't leap from your couch to go buy glue -- but down the road, when you're at the store shopping for glue, they may affect the decision you make. If you don't have any other reason to choose one type of glue over the others, you'll probably choose the one you're most familiar with, Brand X, even if you're only familiar with it because of advertising.

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

  • 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 equals a thousand).
  • 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.

Advertising with Banners

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

  • Arrange to display other Web sites' banner ads in exchange for them displaying its ad.
  • Pay publisher sites to post its banner.
  • Pay an organization, usually a banner network like DoubleClick or Flycast, 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. If you want to post banner ads on other sites but don't have the capital to mount a traditional advertising campaign, you may choose to exchange banner ads with other sites. There are two ways you can go about this. The first is to individually develop relationships with other Web sites and trade specific banners. This is a very natural process and allows you to place your banner ads conscientiously and post other Web site banner ads that fit your site well. Your banner ad doesn't end up on very many sites, however, unless you invest a whole lot of your time in seeking out interested webmasters.

If you want to get your banner ad on a lot of sites in a short amount of time (and don't want to pay for it) then your best bet is joining a banner exchange program.

Banner Exchange Programs

Banner exchange programs offer a simple service. If you post a certain number of banner ads on your site, they will post your banner ad on another site. Usually, this isn't an even exchange; you have to post more than one banner ad for every one of your banner ads they post. This is how the exchange program makes a profit. Their arrangement yields them more banner ad spaces than actual banner ads they need to place for their members, so they can sell the extra banner ad spaces to paying advertisers. The exact ratio varies, but 2:1, posting two banner ads on your site for every one of yours posted on another site, is a typical arrangement.

Most banner exchange programs distribute banner ads in the same way. For every banner ad you've decided to display, the exchange provides you with a piece of HTML code. This code instructs a visitor's Web browser to bring up a banner ad from the exchange program's server. This enables the exchange program to easily change which banner ads are on which sites. They can also monitor the success of particular banner ads on particular member sites, which helps them to pair sites with suitable advertisers.

The advantage of joining a banner exchange program is it's a free way to get other sites to post your banner ads. The disadvantage is that you give up a lot of control over where your ads are posted and what ads are posted on your site. In most cases, the banner exchange program chooses where to put its members' banner ads, and you may not like what they decide to post on your site or where they end up posting your banner ad. Most banner exchange programs attempt to link banner ads and sites intelligently, and they often do a good job, but there is a possibility that at some point you will be dissatisfied with a banner ad that ends up on your site.

Some major banner exchange programs are:

  • LinkExchange
  • BannerSwap
  • SmartClicks
  • Free Banners
  • LinkBuddies

It's pretty easy to join a banner exchange program. Go to any of the above sites and they will walk you through their particular process. It's definitely a good idea to shop around, because different banner exchange programs have different strengths. Some programs concentrate on effective banner placement more than others, and some specialize in Web sites that feature a particular subject matter, such as religion or kid interests. Most banner exchange programs are free to join, but some also offer a better exchange ratio for a small fee.

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 Web site puts a banner ad up and monitors the response 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, rather than your site generally.
  • 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.
  • Put banner ads at the top of the page, rather than farther down.
  • Use simple messages rather than complicated ones.
  • Use animated ads rather than static ones.
  • Your graphic content should pique visitor curiosity, without being too obscure.
  • Keep banner ad size small. If the page takes too long to load, a lot of visitors will go on to another page.

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. 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.

One interesting development that has been around for a while is targeting. Banner ads that are targeted appear based on the Internet user's activity. For example, advertisers can buy keyword advertising on a search engine, such as Alta Vista or Yahoo, 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.

The Internet is an attractive medium to advertisers, because cookies allow sites to gather information about each visitor. It's a good bet that the future of Internet advertising will involve extensive use of this technology to target individual Internet users. Many Web sites are already experimenting with presenting each visitor with specific banner ads that would be likely to interest them, based on information gathered from surveys and the visitor's Web-surfing activity.

WebPaws.com Offers all types of banner ads, some example pricing is listed below:

  • Your choice of one (400 x 40) or (468 x 60) pixel banner ad
    - (for advertising on other sites such as 'Link Exchange')
  • custom banner ad (animated GIF), 468x60, up to 4 layers, $195
  • custom banner ad (animated GIF), 400x40, up to 4 layers, $215
  • additional custom layers for animated banner ads, $50/layer
  • artwork for below ads supplied by customer
  • banner ad (animated GIF), 468x60, up to 4 layers, $85
  • banner ad (animated GIF), 400x40, up to 4 layers, $95
  • additional layers for animated banner ads, $20/layer
  • placement of banner ad on another site, $10/month/site

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