Do Banner Ads Really Work?

You've worked hard researching all relevant data. Your executives have discussed the matter to death. Your staff has finally come up with an appropriate format. Now, your web site is up and running.

Now what? Oh, yes...the public has to find you! Marketing says they have negotiated some free exchanges, but you've got to invest in banner advertising. And so begins the barrage of new terminology: hits, raw hits, page impressions, CPM, click rates, click-throughs. You've entered the game because you don't want to miss the gravy train, but one day, you get the measurements.

"We have only 56 clicks on 2,000 banner exposures?" you ask. "Where is all the money going?"

Typically, your advertising agency gets a 15 percent commission, and the web broker will get another 15 percent, with the rest going to the web site owner who displays your banner ad. The top 10 sites consistently account for nearly two-thirds of all banner revenue.

Banner ads have recently come under attack, however, because of their lack of accountability, and more importantly, lack of effectiveness.

Many experts agree that viewers have become insensitive to their placement. Animated banners in particular seem to be considered intrusive and irritating. Banner placements in the front page of high-traffic web sites don't seem to get the clicks. And those offering banners aren't thrilled with visitors leaving their site to visit yours, anyway. Bottom line: web agencies have trouble justifying the ad rates.

Some web advertisers will now only pay for banner advertising rates tied to the number of people who actually click on the banner and/or visit their site. Some are going so far as to pay only for conversions into sales.

Enter the increasingly-popular use of interactive banners, such as the ones developed by Enliven. Now, you can click on a banner and complete the transaction within the banner.

Some advertising companies consider it an unfair advantage on the industry, but if their medium is effective at delivering your site visitors, they should have no reason to resist this type of "e-couponing."

The ability to track these statistics are relatively simple on a computer. Plan to track the clicks on your banners over a period of time. Spread them out over several web sites and locations within their pages and see what happens.

As the web matures, so will its advertising techniques. When the ad agency makes their presentation, probe for a conversion into sales. Read the agreements. Does the broker want an exclusive agreement? What is their track record? What are their guaranteed impressions? Do their demographics justify their CPM? Do they offer weekly reports? What tracking software do they use?

Just as you stand behind your product, those who sell banner ads will be asked more and more to back the value of theirs.

About the author: Carlos Salum is the Vice President of Marketing of 3iNet, Inc., a technology company offering Internet free faxing solutions based in Houston, Texas.