The Banner Ad - it's a love/hate relationship. Design a good one and turn that passive viewer into an active user.

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According to CyberAtlas, Web advertising revenues in the United States increased 1.9 percent during the first half of 2002, compared to the same period last year - growing from USD1.504 billion to USD1.532 billion. Online budgets are also increasing. Based on a survey by the Internet Advertising Bureau of Canada and reported in dmnews, 43 percent of respondents who advertised online last year had an average annual budget of CAD146,000 (USD95,674). The report states that Canadian advertisers increased their online budgets in 2002.

In addition to positive statistics, banner advertising offers other benefits to drive its growth in the online advertising arena including a cost effective way to attract a world wide targeted audience to your products and services. You can develop and test a banner within hours and obtain results on its effectiveness almost immediately, whereas with traditional marketing it takes days or weeks to have your ad appear and then measure its results. Banner ads are also an interactive tool with a strong ability to create brand awareness.

There is no doubt that online advertising and the use of banner ads is here to stay. What is changing, however, is the banner ad itself. New technologies have changed the static, traditional banner ad into an interactive rich medium that can create a sensory experience for the consumer, transforming a passive viewer into an active user who is more likely to respond to the ad message.

Whether you are going to sell advertising space on your site or engage in your own banner ad campaign, a general understanding of the banner ad and its supporting technology is important to know.

Banner Ad Types

Like traditional advertising, there are different types of banner ads you can develop, which will depend on a variety of factors including your audience, online goals, and budget, to name a few. Following is a list of the most common types of banner ads.

Banner Ad Types
Ad Type Description
Traditional Banner Ads The simplest banner ad features one static GIF or JPEG image linked to an advertiser’s home page. The GIF-animated banner ad is one of the most common and widely used forms of online advertising. Animated or static .gif banner ads reach the widest possible audience since almost 100 percent of users can view them without special plug-ins. In addition to loading quickly, traditional banner ads are easy to design and change, and can be easily inserted into a Web page.
Interstitial/Pop-up Ads Interstitial ads are ads that interrupt the user, such as a pop-up ad. Pop-up ads appear when you click a link or particular location on a web page. The ad comes up as another window and is removed only when you click to remove it. They come in different sizes and with different levels in interactivity, from static to fully animated productions.
Rich Media Ads Combining video, audio and the Internet, rich media ads use technology such as Java, Flash and Shockwave to increase the functionality and interactivity of online ads. Rich Media ads can include animations, movies and video, streaming audio, as well as interactive features such as product/service demos and presentations, surveys, order forms, and interactive games.
Floating Ads This type of ad ‘floats’ or ‘flies’ across your computer screen forcing you to notice them, making them a powerful branding tool.

Rich Media

Rich media provides advertisers with an opportunity to develop a more targeted marketing message that can meet their customers’ needs. By developing an interactive environment that can engage the customer, providing detailed information, and creating entertaining tools, rich media can transform a passive consumer into an active one.

Rich media ads are effective because they entice consumers to spend more time interacting with the banner, which means the consumer spends more time with the advertising message and is more likely to respond to it. However, rich media has not come without it challenges. While the return on investment is generally higher for rich media ads, implementation can be more time consuming and costly. Compared to a regular banner ad campaign, a rich media campaign can take weeks to develop and test. Opponents of rich media also state it takes up too much bandwidth, which means that customers with Internet connections of 28.8 Kbps or 56 Kbps are less likely to see the message because they will not wait for the ad to fully download.

However, rich media banner ads are becoming more popular with new technology developments. To circumvent bandwidth limitations, streaming media such as RealAudio allows customers to view a file as it is downloaded rather than wait for the entire file to download. And, despite the costs to develop rich media ads, the interactivity they provide increases brand awareness, improves recall and conveys the main message more effectively than standard banners.

A review of industry statistics provides a solid picture of where rich media is moving. For example, according to Red Herring Communications, the rich media market will reach $34 billion by 2004 and E-commerce will be a primary driver for rich media use. Forrester believes that by 2004, rich client interfaces will drive the majority of consumers’ PC-based Web experiences. And, Jupiter Media Metrix states that by 2005, almost 30 percent of online media spending will be devoted to rich media or streaming advertising.

Developing and Managing Your Banner Ads


Whether you develop your online ads in-house or outsource the task to an outside agency depends on a number of factors including the type of ad you want to develop, your level of technology expertise, your budget, and the level of control you want over your ad development.

For example, if you have little ad experience, it would be beneficial to hire an advertising or media company to develop the ad for you. They can work with you to develop the ad concept and create a professional looking ad for your site. At the same time, this can be an expensive undertaking, particularly since many agencies only deal with accounts of a certain size.

If you are interested in developing simple banner ads and are concentrating more on banner placement as your strategy - and you have some technical expertise within your company, then developing your ad in-house is a viable option. It is less expensive and you have more control over the message you develop. To develop your banner ad there are various technologies you can use including Fireworks, Flash or Paint Pro Plus. Alternatively, there are several online banner programs available online:

Animation Online:

These types of online banner creation programs do not always offer the ability to develop high level, interactive banner ads. Therefore, if you do not have the expertise within your company to develop rich media ads, it is useful to find an advertising or media company to assist you. Take your time shopping around, make an informed decision and find the best agency for your needs.


Regardless of how you develop your online ads, placement of them is highly important. After all, what would be the point of spending money on developing ads your target audience will not see?

Again, you have the option of finding the right web sites for your banner ads on your own time or hiring a broker, like a banner ad network i.e. Doubleclick, to do the work for you.

Decision Factors In-house Broker
Expense Niche focused, smaller advertising sites provide a less expensive route for advertising. Large banner networks mostly sell advertising space to large high traffic sites, which can be expensive for small companies with limited ad budget.
Time Have to approach each site individually, determine if their content matches yours and potentially deal with advertising companies who have no set ad plan Can negotiate for you and spend time finding various placements for your ads.
Control Can fully investigate the best sites to reach your targeted audience. They decide where to place your ads and may give you less attention because of the number of clients they serve.
Mgmt/Evaluation You are responsible for managing and evaluating the effectiveness of your ads. Often include tracking software to measure your online ad success.

Ad Measurement

Measuring the effectiveness of online advertising campaigns is not simply about numbers. It is about measuring the quality of the relationships you build with your customer base. You may have many hits, but if your visitors are not staying or visiting a second time, there may be something missing in your online strategy. As a result, it is important to look beyond the numbers and delve further into the reasons behind customer visits.

On a basic level, you can learn a lot about the behavior of your customers through log file analysis. Log files can tell you how visitors get to your site, give you an indication of key words used in search engines, tell you which pages are visited the most, and provide insight into the browsers that your visitors are using. With this information, you can develop more effective ad campaigns in the future.

Measuring banner ad effectiveness can be done in a number of ways. While one measure may be more important to advertisers than others, the most common measurement techniques include the following:

Click throughs - The number of visitors who click on to a banner ad that is linked to the advertiser’s Web site. When you sell the space, it is usually on a cost-per-click basis.

Click through Rate (CTR) - Expressed as the percentage of times that visitors of a Web page click on a particular banner ad. Click through rates are usually below 1 percent. For example, you may have 1 visitor out of 200 that actually visits your site and clicks on a banner ad, which gives you a click through rate of 0.5 percent.

Cost per Sale - The amount of advertising money an advertiser spends to generate one sales transaction. Often uses Internet cookies as a way to gauge visitor activity.

Pageviews (Page Impressions) - Number of times files/pages are requested from the server. Measures how many visitors were exposed to or impressed by the banner ad. When you sell the space it is commonly done on a cost-per-thousand (CPM) basis (describes the cost of 1000 ad impressions).

These types of measurement are useful when compared to industry statistics. For example, if you are achieving a click through rate of 1 percent, you are doing fairly well when considering the industry average is less than 1 percent. These figures can also be useful for comparing different banner campaigns and measuring their effectiveness in relation to each other. For example, you may find you are achieving a higher click through rate with floating ads over animated ads.

While these types of measurements were popular five years ago, by themselves they are no longer seen as an effective way to measure banner ad effectiveness. Internet marketers are realizing the importance of quality over quantity. Therefore, they are much more interested in building long-term relationships with customers that translate into sales and looking at ways to track their visitors’ level of interest, loyalty and activity - something traditional banner ad measurement techniques, like click through rates, do not provide on their own. As a result, advertisers are using a combination of various measurement analytics that combines banner ad measurement techniques with basic log analysis and other more advanced industry software to give them the answers they need.