Banner Advertising on the WWW
/ Dave Kristula / Dave's Site / October 9, 1996 /
Table of Contents
Introduction to Banner Advertising...

The most popular form of advertising on the Internet's World Wide Web is currently banner advertising. A banner (graphic image) and link are displayed on a high traffic web site, in which the people visiting that site (the audience) see when the page loads. This banner commonly advertises a product, service, or just another web site. It can also be used to show someone's point of view on a certain topic (for example, a presidential election).

-Common Banner Ads-
Currently the most common type of banner advertising is by showing the banner near the top of the web page. If this is a paid banner it is usually the only banner ad that appears on the page. This type of banner space is usually sold by impressions, or banner views, although it is sometimes sold by click-thru, when the user clicks on the banner for more information.
-"Medallion" Ads-
This type of advertising is newer and not widespread. A column of multiple smaller banners are shown on the side of the web page. Because so many ads appear on a single page, it is usually sold by click-thru only. This type of advertising gives the page designer less room for content, so is usually only used on pages with written articles, such as webzines.
Type A Banner Type B Banner
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The Difference between Static and Rotated Banners

There are two major types of banners, static banners and dynamically-rotated banners. Static Banners do not change, they stay the same to every user, every page load. Dynamically-Rotated Banners can change for each user.

(Example- Let's pretend there are two people... Person A and Person B. Person A loads a page with a static banner. Person B loads the same page with a static banner. Both users see the SAME EXACT BANNER. Now let's say Person A visits a page with a dynamically-rotated banner and Person B visits the same page with a dynamically-rotated banner, Person B most likely saw a DIFFERENT banner than Person A saw.)

A dynamically-rotated banner is usually a more effective way of advertising, but it requires a program to work, most commonly a .cgi script. With dynamic-rotation, you are able to advertise a different banner to each viewer, therefore you are able to have multiple advertisers, or, mulitiple banners for one advertiser, or any combination. With a static banner, you can only have a single banner, and only a single advertiser for that page.

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More Banner Basics...
How a .cgi banner rotation works: Okay, so you have a dynamic-rotating banner script and banners on it... so how do you know if someone clicked it? When a user loads the page, the .cgi is called requesting a banner and link. The .cgi will then give a banner and log that the banner was displayed. If the user clicks the banner, the .cgi is called again, first logging the click, then redirecting the user to the new page automatically. This is transparent to the user, for it takes less than 1 second.
How to dertermine a CTR: If you were to look at the log, for example, it may say that a banner was displayed 400 times, and was clicked 15 of the times that it was displayed. If you take the number of displays divided by the times it was clicked, this will give you your CTR, or Click-Through Ratio. In this case, 400 divided by 15 equals 26.6, so the CTR for this banner would be 26.6:1. The smaller the number (10:1 would be better than 15:1) the better.
Translating a CTR to a %: To figure out a percentage of effectiveness, you take 100 divided by your click-through ratio. If you had a CTR of 30:1, you take 100 divided by 30, which is 3.3, or 3.3%. If you have a CTR of 40:1, you take 100 divided by 40, which would be 2.5, or 2.5%.
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Uses for Web Banner Advertising...

Increasing site traffic: This probably the mostly likely thing that you will use banner advertising for.
  • To sell more of your product(s) or service(s).
  • To be able to notify buyers of your new product or service, or offer them a special deal/discount.
  • To Spread your ideas about a certain topic.
  • To get people to remember your company's name! (Incase they wish to have your products or services in the future!)
Advertising on the Web with banners means more sales and/or more influence!
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Advantages of advertising independently...
Freedom: If you get to choose your own rates, standards, etc you will have better control over the layout of your site. If you are independent you make your own rules.

More Reliable: You ads don't go down unless your site goes down. You won't have to wind up finding a new advertising broker if you current one declares bankruptcy.. (very common these days.. <g>)

More Profitable/Less Expensive: By running your own ads, you will be able to ask more from the person wanting to advertise, yet your asking price will be able to be lower than what your broker/rotator would charge. So you earn more, and the people who wish to advertise will pay less. Everyone is happier.

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Disadvantages of independent Advertising...
More Work for you: Getting your own advertisers and maybe customizing the rotator and/or rewriting one can be a real challenge. If you want to be independent, expect to spend much more time working, and maybe even being a little more stressful. (If you saw how much larger your paychecks would be you wouldn't mind that much...)

More Costly to Run: Having a server that is able to handle your rotation scripts may be more expensive then what you currently pay. It is most unlikely to find an free provider that will allow you to run these simple (yet complex) scripts. (My server allows these scripts, but I end up paying a pretty penny for it... $30 a month for a non-virtual domain, and $50 a month for a virtual domain. (total web hosting cost, including unlimited traffic))
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Methods of charging for banner ads...
Charge by Impression or by click-through? These are the two popular ways to charge for banner ads. An impression is a banner load on a page by a unique IP. (Note: Online services use the same IP for many users, so this usually causes a few wars to break out) Sometimes an impression is noted as a banner load, no matter the IP... so the word "unique" is added to "impression" to show that each IP is only counted once (per page). A click-through, on the other handle, is a method of charging only when a user actually clicks the banner. (which will send the user to the site being advertised) Generally, a click-through rate of charging should be higher than an impression rate. If you are charging by click-through only, you have the option to place two or more banners on the same page, which will result in higher chances of someone clicking a banner (or.. really annoy them.. hehe).

Have a linked rate page giving information on what you are asking (charging) for advertising... you should include the following on this page...
  • A contact person (usually an email address)
  • Your rates (click-through or impression, depending on which you choose)
  • More details on where you will put the banner, it's size requirements, etc.
  • Information on contracting... (deposit or prepayments)
  • A list of the pages you are accepting banners for... their description/target audience, and how many hits you receive to that page in a month.
You should require a deposit or prepayment, and those wishing to advertise will find it more attractive if you give them an OPTION to lower rates (discounts) if they buy a certain length contract (for example a 3-month contract, etc)
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How much to charge?
If you sell impressions, your rate is called a CPM, for cost per thousand (banner views). Common CPMs are from $10 to $30, and sometimes up to $70 if highly targetted. This averages out to 1 to 7 cents per banner view.
If you sell click-thrus, you charge per click. Common charges for a thousand clicks are from $20 (on medallion pages) to $250 (on highly targetted pages). This averages out to 2 to 25 cents per click-thru.
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Glossary of Banner Advertising Terms
Audience
Web pages visitors who see the banner advertisment.
Banner
A graphical image, usually colorful - attempts to catch the user's attention.
Impression
A single banner view on a page hit.
Click-thru (Click-through)
The result of a user clicking on a banner adverisment that was displayed.
Click-thru ratio (CTR)
The effectiveness of a banner ad, determined by comparing the number of banner views to banner clicks.
Page Hits
Number of times a page was accessed (does not include images)
Raw Hits
The number of of images and pages accessed. (Example- if you had a page with 5 images on it, the page would cause one raw hit, and the images would cause 5 raw hits, for a total of 6 raw hits)
Traffic
Amount of visitors, usually dertermined by number of page hits or impressions.
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Copyright © 1996 Dave Kristula. All rights reserved.