Banner Ads - What Are Banner Ads Supposed To Do?

WHAT ARE BANNER ADS SUPPOSED TO DO?

Banner ads serve three basic functions. Their purpose is to build brand awareness, sell something, and drive traffic to an advertiser's Web site. While the latter two functions are measurable and can be tracked, the first is not measurable, leaving proponents of banner advertising some wiggle room when critics point to declining click-through rates. In order for advertisers to make effective use of banner ads, they need to establish goals for their ad campaigns and determine whether they want to build brand awareness, sell something, or drive traffic to their Web sites.

Advertisers may purchase advertising space for their banner ads on individual Web sites, but most advertisers work through an ad agency or network. Networks such as DoubleClick Inc., 24/7 Media, and Engage represent groups of Web sites and sell advertising on them in addition to offering other services to advertisers. Advertisers are charged for banner advertising using one of two models. Under the CPM (cost per thousand impressions) model, rates are based on the number of viewers. Because advertisers demanded a model that was more action-based, the CPA (cost per action) model was developed, whereby advertisers are charged only when a click-through is made on their banner ad.

Another option is to join an affiliate network, such as Commission Junction (www.cj.com) or Link-Share (www.linkshare.com). Through affiliate programs, Web sites select banner ads they believe are appropriate to display on their site. The affiliate network then keeps track of click-throughs and pays the Web site a commission on each click-through instance.