Understanding Banner Adertising
Posted by Anne Ahira on: 2005-10-31 23:19:29
Self SEO > Online Promotion Articles
What is banner advertising?
A banner ad is a graphic that is displayed on a network of websites. When someone clicks on that banner, they are taken to the site of the person, or company, that owns the banner.
Most banner advertising program operates on an "exchange" basis, meaning that you usually have to add someone else's banner to your site. Every time someone else's banner pop ups on your site, you earn credits to have your banner displayed on the advertising network.
Here are some terms you need to know about banners:
CPM - Cost Per Impressions
The "M" comes from the Roman numeral for 1,000. So $20 CPM represents $20 per 1,000 displays of a banner
CPC - Cost Per Click
You pay an agreed amount for each click-through to your site.
CT - Click-Through
A click on an ad which takes the viewer to another site
CTR - Click-Through Rate
This is the number of people who click on an ad (banner or text link) divided by the number of displays of the ad, represented in percentages. e.g. 50 people click on an ad that has been shown 1000 times, which works out at: 50/1000 X 100% = 5%.
ROS - Run Of Site
This means your banner will be displayed on most or all pages of the site.
How Many Impressions Should I Purchase?
You should request a test run of 10,000 or 20,000 impressions. This will give you an idea of how effective your banner will be in the site you wish to advertise in. If the site is untargeted, expect results of 0.5-1.0%. If it is targeted, expect anything up to 2 or 3%. It is not unheard of to get click-through rates of 5, 10 or even 15% or higher. Some advertisers have achieved a click-through rate of 8-14%. But this is rare, rather than the norm.
Where Should My Banner Be On A Page?
It is always best to go for the top fold of a page, as the viewer is more likely to notice your banner, while the page is downloading. You will pay a lot less for being on the bottom fold of a page but you will also get a lot less results. How many times have you visited a website and clicked on a link before ever getting to the bottom of the page? If your banner is displayed at the bottom fold, you will be paying for advertising that very few people will actually see.
Where In A Site Should I Advertise?
Most sites only offer "run of site" advertising, while some will offer banner spaces, targeted by page/s or section of a site. If you opt for targeted advertising, expect to pay a higher CPM rate for this, but you're likely to get a better click-through rate, as a result.
So What Does It Really Cost?
Well, let's assume that you pay a rate of $10 CPM (1,000 impressions) and your banner achieved a click-through rate of 1%. 1% x 1,000 = 10 click-through. At a cost of $10 CPM, each click-through would cost you $1.
So is that worth it?
Let’s say you’re a member of FFSI for example:
If one out of every ten visitors joins FFSI with you, and you make $45 in Bonus plus residual income for the next month, then yes - it is worth it.:-)
Let’s look at the math: 10 visitors @ $2 each costs you $20. $45 Bonus from FFSI minus the $20 it cost you to bring the visitors to the site, leaves you with a $25 one time profit "plus" residual income for next month.
Let’s assume a lower conversion rate: What if only one in 20 visitors joined FFSI with you? 20 visitors @ $2 each costs you $40. That leaves you with ONLY $10 profit, BUT you would still get residual income for the next month, and your downline would be growing :-)
If you’re not getting the conversion you would like, I suggest you either improve the click-through rate, by advertising in a more targeted site, or test new banners. Alternatively, you can try to get a lower CPM rate, either with your current advertiser, or more likely, on a different site.
By: Anne Ahira
Editor The BEST Affiliate Newsletter