Marketing your e-commerce website:
Banner advertising basics

There are thousands of web sites out there who want to sell you banner advertising for your e-business or e-commerce website. After all, banner advertising was a “big deal” on the Internet a few years ago. That was, of course, before surfers had such excellent ways of finding the information they want. Today, the average click through rate of banner ads is much lower. Many surveys report click through rates as low as half a percent or less.

Over the past few years the click through rate for banner and pop-up / pop-under advertising has dropped considerably. (If you are one of those pop-up / pop-under advertisers I hope every one downloads a pop-up blocker) If you are going to use banner advertising you need to make sure that it makes sense for you. The following will help you insure that your banner program is worth the cost.

There are three aspects of banner advertising you must evaluate before you can decide if the program is worth the time and money you will spend.

Cost: Sites use several types of pricing for banner advertising. The most common are:

• Cost-per-click: You pay for each time a visitor clicks on the banner to come to your site. Generally this is considered the best way to buy banner advertising because it guarantees a maximum cost for each new visitor you get.
• Cost-per-impression: You pay for each time the banner or ad is displayed to a visitor. Many traditional advertising types prefer this pricing method especially when doing “image” or “brand” advertising. 
• Flat fee: You pay one fee regardless of impressions or clicks

Most web experts prefer the cost-per-click because it fits into their current site measurements, which are based to at least some extent on the number of visitors to the site. Just about everyone, however, agrees that flat fee rates are NOT the way to go. You have no idea of what you are getting for your money until after the fact. If you are going to buy flat-fee banners make sure you measure the resulting clicks carefully to determine the effectiveness of the campaign.

Effectiveness: If you are spending money on a cost-per-click or cost-per-impression plan you want to make sure that you are getting maximum value. To do this you have to understand the effectiveness of your banner. 

Click rate is the ratio of impressions to clicks… you get one click for every 100 times someone sees the ad. When we set up a banner advertising program we generally develop half a dozen banners and load them using rotating presentation. We then track the resulting clicks to see which produces the most clicks. If the ad schedule is huge we will generally create half a dozen variations of the best banner to see if we can improve on the performance. 

This part is important because it tells us what we can expect from the advertising prior to starting the campaign. It will also give us an indication of whether or not the numbers provided by the site are accurate.

Market: Are the clicks coming from the right market segment? A house wares site has little use for even tens of thousands of pre-teen visitors. Whenever possible you need to be able to track visitors to your site by the banner they clicked to get there. You then need to look at the pages the users visited after the click into the site and how many abandoned the site after clicking in. Ten thousand clicks are worthless if the visitors immediately click the back button.

These are the basics of managing a banner advertising campaign.

• Choose a billing method you can live with.
• Test your banners to determine the best response.
• Track the visitors to make sure you are reaching the right market.

If you follow these suggestions you will stand a pretty good chance of having a successful online advertising campaign that you can clearly justify.

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