Are banner ads still an effective advertising tool for websites? The truth is that, though banner ads used to be used widely in the online world, many websites have stopped using banner ads as an advertising tool. One reason for this is that click-through rates have fallen to an average of 0.39%, which does not help motivate website owners to keep using banner ads.

However, there seems to be a time and a place for using banner advertising effectively. There are some factors you need to consider to motivate you to keep using banner ads to promote your website:

1. CPM - this acronym translates to Cost Per Thousand, meaning the price set for every thousand times that your banner ad will be displayed at the host website. For example, the owner of the host website might charge you $10 per CPM, so that is equivalent to $10 for every 1,000 times that the banner ad is displayed on the host website.
2. CTR - this means Click Through Rate. It measures how effective your banner ad is, and the level of exposure that it has. Like we mentioned, click through rates have fallen on average in the industry. A click through rate will show you how many people saw your banner ad and proceeded to click on it as well.
3. Advertising cost per sale - all advertisers are out to get one thing: sale of their product or service being promoted. Measuring advertising cost per sale will show you how much you spent on advertising to get the sales volume.

Generally, if you pay a lower CPM on one website, that translates to more savings on advertising cost for you than a higher CPM on another host website. Your goal is to improve your CTR so that you can recoup the money you spent on CPM.

Techniques in banner advertising

1. Targeting - when you do targeting, basically you are honing in on certain keyword categories that Internet users favor using. This is why some search engines offer keyword advertising to advertisers - meaning, if an Internet user types in a keyword into his search engine, the banner ads of the advertiser will be shown to the Internet user as part of his search results. This technique is based on the assumption that a banner ad which uses certain popular keywords has more appeal to an Internet user who will use those keywords in his search.
2. Promoting the advertised product or service - all banner ads do this though some do a better job than others. University of Chicago business professors found through research that banner ads do help businesses in customer retention since customers are able to find their way to the website of the advertiser faster and they are allowed to spend on the advertised product or service in an easier fashion.
3. Relying on credible-looking banner ads - just what would make a banner ad look credible? Well, this is very subjective, and often arbitrary (kind of like trying to get people to agree on what constitutes pornography, actually.) In the same way, one person may think the banner ad he created is an example of fine art, while others who see the same banner ad may find it offensive. Generally though, a credible-looking banner ad is one that: provides genuine information; is easy on the eyes; provides clear directions on how they should be used by the Internet visitor; and does not promote get-rich-quick schemes to draw in more traffic. (An example of a common get-rich-quick banner ad tactic is to have your banner ad suddenly show up on the screen and declare that the startled website visitor has won a million dollars - simply because he happened to be the 999,999th visitor to look at that home page.)

It is really a hard judgement call trying to choose whether to keep using banner ads in your campaign or not. Use them in moderation at the start - if they are not effective, then stop using them. Sometimes it boils down to just that, in the end.

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