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The Hit Parade - Effective Banner Advertising

Banner advertising is often touted as the major source of revenue for Web site owners, and many in the industry believe this is the route forward But many more believe that much work needs to be done before big profits can be made

Banners are the small advertising strips, which usually appear at the bottom or top of Web pages and are linked to the site they are promoting. They can be hosted on Web pages free of charge or paid for. Charged banners correspond to ads on Web pages of search engines, providers, or service sites. Free banners are based on exchange: I host your banner; you host mine. There are banner exchange organisations such as Link Exchange where each subscriber sets the banner on their server and adds an HTML code on their own page.

Banner sizes vary from 400 to 600 pixels wide and 80 to 100 pixels high. Some sites will only accept smaller thumbnail banners. But what all site owners look for is a small-K banner; usually one that needs no more than 7 kilobytes of memory to download and without a transparent background.

The purpose of banner advertising is to seek attention and persuade the end user to click the hyperlinked logo on the message strip in order to access the main site. An effective banner needs to have immediate impact as ads are noticed and rejected in the space of about half a second. During that twinkling of an eye, users decide whether they are interested or not. A banner can be far more effective as a point of entry to a company's products and services. The banner's location is critical and a good knowledge of the target audience is essential for effective banner placement. The strengths of the banner ad lies in areas such as building brand awareness and providing a standard size to plan around.

Seek and ye shall find

Seek and ye shall find According to recent reports nearly all expenditure on banner advertising is spent on the same top 10 Web sites, which include the major search engines. Directories such as Yahoo and InfoSeek can expect up to 100,000 user hits every day. Rates for banner placements on some of the large and more frequented search engine sites appear to be proportionate to full page ads in mainstream magazines. Although rates vary based on site content, target market and visitor activity, Patricia Comenares at WebConnect recommends around US$500 per banner link (between 420 and 490 pixels by 70 to 80 pixels).

Increasingly sophisticated targeting strategies allows the banner ad to find its audience according to the target's domain, ISP browser, platform, and search topic. Most search engines can tailor banner displays to the searches people are making and thus increase your chances of getting in front of the target audience. For example, if a user is searching for information on cars, the search engine provider may have many advertising customers including car manufacturers and will display the most appropriate banner.

Sites earn money based on the number of times their page is accessed with a banner prominently shown. A newer procedure is to sell click-through (CTs) meaning that a viewer must actually click on the displayed banner and travel to the advertised site. Many sell these advertisements on a site DPM (Display per Thousand) or CPM (clicks per thousand).

What makes a good banner ad?

In the world of the banner ad, it's fair to say that simplicity sells. There's a failsafe rule of direct response called K.I.S.S. which stands for Keep It Simple, Stupid. These are the guidelines to create banners by. Banners are the teaser not the whole story. It's a case of less is more, so they should tempt not pound your prospects home by being text heavy. The graphics should improve the message, not detract from it. Many designers feel obligated to unleash their creative powers on the diminutive banner ad. That may be an unnecessary mistake, according to Tony Heish of the Link Exchange. "The best looking banners are not necessarily the most effective ones."

Many banner designers have begun to incorporate lava scripting and animation in their banners. This does have the effect of attracting higher click-through rates, but this may be at the expense of the site, which isn't going to be very happy to have customers seduced away.

The visual aspect is certainly one of the most important factors. "A good banner must contain an attention-getting element, a call to action and a reason to click through," observes Jim Waltz, director of sales and marketing at Digital Music Network. Some banner advertisers like Tom Venetianer of MVA Consultores Associates, believes that the textual portion of the banner is its most vital element. "The design should be nice looking and small. And the text must have content. Content that ignites clicks."

Size is a problem

The ad banner has a size problem that makes it financially difficult for publishers and creatively challenging for advertisers to get their message across. Web sites that usually run to hundreds of pages normally post banners only on the 10 or 20 most visited pages, and then only a few banners at a time. Therefore, advertising that covers less than 5 per cent of a Web site's total page space is required to carry the cost for the entire enterprise.

Some advertisers complain that a skinny banner fluttering across the top of a Web page does not deliver the same effect as a full-page glossy magazine spread. As a creative area, the size of the banner is hard to work with, particularly when trying to create a strong brand experience. An element of desperation creeps in, some sites ply their readers with free gifts and discounts and there is a disturbing tendency to view the banner as crude teasers for company Web sites. Clearly, there is a need to reinvent the banner in larger sizes, in alternative shapes and unexpected locations to surprise the user.

Big hitters

Determining the differences between accesses and number of hits (which can be measured by variables such as number of graphics per page or number of clicks per session) is critical. Big hit numbers are no longer likely to impress as the follow-up to any hit statement will be "How many individuals does that actually represent?"

Advertisers want to know about consistent site activity and growth. Sponsors will be sceptical of bonus circulation based on start-up curiosity. Bob Colvin of Interactive Media Sales recommends that a site have between 3 to 6 months worth of consistent site traffic before you set out on your quest for sponsorship.

It may be premature to write its obituary, says Rosalind Resnick, president of NetCreations, but she believes that banner advertising is in trouble. The reality is that the vast majority of Web ad revenue is ending up in the well-lined pockets of the search engines and directories. Netscape Communications is the leader in Web ad sales, scoring U5$~ million dollars apiece from each of the five Internet search engines.

Looking for alternatives

Resnick believes that advertorial is a viable business model. Even HotWired, creator of the banner ad is blending content with commerce in order to give its sponsors a better connection to potential customers. One of HotWired's latest enterprises involves their advertisers sponsoring microsites, multiple pages accessed via an ad banner or button, which are seen as less intrusive than banner ads.

HotWired were the pioneers of banner advertising since the e-zine's launch in October 1994. However even Hunter Madsen, vice-president for commercial strategy at HotWired admitted: "The ad banner got Web advertising off to a weak start." He expresses concern that most Web sites are finding it hard to attract enough banner advertising to stay afloat. Undaunted, Madsen still has faith in the future of his protege: "Rest assured that banners will be a staple of the Web for years, especially in hit-and-run zones such as search engines."

Another alternative venture is direct e-mail advertising, which was considered a serious breach of Netiquette only two years ago. It has now become an acceptable way of doing business in some areas. Dozens of companies have electronic mailing lists containing names and addresses of online users for direct marketers to target. While 'spamming' Internet users with unsolicited e-mail is still unpopular; companies that take the progressive approach of giving users the option of receiving their mail are utilising the killer application of the Web as well as potentially making money.

A look at the strategies of the major players could be a way of finding out how the future of banner ads is likely to shape up. Microsoft is reputed to be the largest Web advertiser and according to Jupiter Communications, the company spent US$10.7 million on advertising in 1996. Microsoft is involved in asking sites to accept a pay-per-download scheme for online banner ads. Instead of using a cost-per-thousand model to pay for the online ads, or even a click-through model, Microsoft will pay sites a fee only when users click on the ad for the latest version of the Internet Explorer browser and then download the browser. Microsoft has also spoken about its plans to team up with advertisers to develop sponsored programming which consists of "95 per cent entertainment and 5 per cent marketing message," says Marty Levin of The Microsoft Network.

While banner ads clearly have an assured place in the future of the Internet, an increasing number of advertisers are concerned about its limitations and effectiveness. It seems that companies like Microsoft are seeking ways to incorporate the basic model of the banner ad into a more effective marketing campaign. The ability to attract attention fast is one of the banner ad's best features, and this is where it can be put to best use. A quick, enticing first impression in a targeted and complex advertising strategy.

This article was first published in Internet Business Magazine May 1998