 Using
Banner Ads to Promote Your Website - Web Marketing |
| We are in a period when banner advertising
seems to be on the wane. You know, those rectangular, flashing
boxes at the top of webpages on commercial sites. Click-through
rates have dipped to 0.39% average and the industry magazines
regularly carries articles discussing the death of banner ads.
But while banner ads aren't as effective as they once were,
the truth is that a great many companies, large and small, still
use banner ads as part of their advertising mix and will continue
to do so. Nevertheless, advertisers are becoming more sophisticated
about when and how to use banner ads. |
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| How
Do You Measure Success? |
| You'd think that success would
be easy to measure, but advertising has never been a simple
art. Ad agencies have their unique self-serving spin, advertisers
set their own objectives, and banner ad designers see something
else again. Here are some of the factors involved: |
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| Click
Through Rate (CTR) |
| This is a basic measure of
how effective an ad is. CTRs range from the industry average
of about 0.39% to 10%. As a general rule, the more targeted
the site, the higher the CTR. For example, you'd expect an ad
for Wilson Tennis Racquets to get a higher CTR on a tennis site
than on a general sports site. A run of site on a general site
such as MSNBC would get an even lower CTR. (Disclosure: I hold
no financial interest in Wilson Sporting Goods, but wish I did.)
Directories and search engines also sell banners ads that pop
up when a particular keyword is entered. Thus your banner could
show only when someone entered a searchword that included the
word "tennis." However, the more targeted the banner
exposure, the higher the CPM (cost per thousand banner views). |
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| Cost
Per Sale |
| A much more important figure
is the actual cost of making the sale of a tennis racquet. In
the final analysis, you don't care how high the CTR is if it
doesn't result in a proportionate number of sales. What complicates
this is the fact that your banner ads on the World Tennis Ratings
site may actually sell fewer tennis racquets than those on NCAAChampionships.com.
You can only make this determination when you use sophisticated
tracking methods using cookies to separate the lookers from
the buyers, and determine which sites and which banner ads had
the best result. |
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| Branding |
| While CTR and cost per sale
relate to direct marketing objectives, another way of looking
at banner ads is as "branding" tools. They create
brand awareness, and a brand image in the viewer's mind, whether
or not the viewer clicks on the ad. But hopefully, when the
viewer gets ready to make a purchase, those "impressions"
(a wonderful ad agency buzz word!) will cause you to select
Coca Cola over Pepsi, or Barnes and Noble over Amazon, or JCrew
over Lands' End. Branding is very difficult to measure, but
can be very powerful. Typically, only the larger and better-established
companies have the budget to pursue branding consistently. Brand
awareness is sometimes measured in surveys with questions such
as: "What brand names can you recall in the field of tennis?" |
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| CPM
Banner Economics |
| While brand marketers may
assess effectiveness in some fuzzy way, direct marketers look
at any advertising method in terms of how many sales it produces
immediately. Let me give you an idea of how the numbers might
look for banner ads. Your results will vary, depending upon
where you advertise and the effectiveness of your creative.
Here are some arbitrary numbers to use in our calculation: |
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CPM = $10 (a typical rate
for general, not-very-targeted websites)
CTR = 0.5%
Conversion Rate = 2%
Cost per Visitor = CPM / 1000 * CTR = $10 / 1000 * .005 = $2 |
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| In our example, the $10 you
spent to show the banner ad to 1000 people netted you 0.5% or
5 visitors to your site. Each visitor cost you $2 to get there.
Hmmm. Not inexpensive. But now let's calculate what your advertising
cost is per sale. |
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| Cost per Sale = Cost per Visitor
/ Conversion Rate = $2.00 / .02 = $100 |
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| Lower
Cost Approaches |
| What this all means is that
banner advertising on a CPM basis can be expensive. If you have
a compelling banner that 5% to 10% of the viewers click on,
that can change the economics. If the price you pay for banner
ads drops to $3 CPM, that can help, too. If you can pay a modest
cost per click through, that would make a huge difference in
the cost per sale. If you can pay a commission of 5% to 15%
only when a sale is made, affiliate programs begin to look more
and more attractive. But no matter which approach you use to
pay for advertising, developing and placing 468 x 60 pixel banner
ads is likely to be part of your advertising mix. |
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| Contact us for placing ads
on msn, yahoo or any other popular website. We also offer ad
designing services. Below is the example of banner ad. |
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