Everyone who has been using the Internet for some time has seen a banner ad, which is what is used for banner advertising. A banner ad is an advertisement which is contained within a rectangular box which ask you to click on them. If you follow that request, the next page you will see will be the webpage of the company or individual advertising through the banner ad.

How do banner ads work?

A banner ad relies on very simple HTML codes to function on the Internet. However, they have a very strong impact when used as part of the advertising campaign of a company or individual. Advertising is how many websites make their money, rather than from simple visits by Internet users. If you click on the banner ad, that brings in money for the website hosting the banner ad. The money is paid by the company advertising through the banner ad; the owner of the website simply gives permission for the banner ad to appear on his web space, in return for a fee when someone clicks on the banner ad. Ergo, Internet business commences.

The more high-tech banner ads employ animation in addition to standard graphical elements, and text. Such high-tech ads can even change the content of the images that you see from minute to minute, or even second to second.

Why are banner ads used?

The company or individual advertising his product or service through banner ads is hoping that the person who clicks on his banner ad will eventually buy the product or service being advertised. If not, the advertiser hopes that the name of his business and the product or service will make a lasting impression in the mind of the website visitor.

Branding is another side effect that the advertiser hopes his banner ad will have on you. Branding is when you see the brand name of the product or service, and later on, when you need the product or service being offered, the brand name you saw before will be the first thing you think of.

How do advertisers measure banner ad impact?

A banner ad can have different levels of impact on different people. To standardize matters, advertisers rate banner ad impact in the following ways:

• Cost per sale. Here, the advertiser measures the amount of money spent advertising just to come up with one sale. To compute this, some advertisers rely on Internet cookies to monitor how many visitors visited their website by clicking on the banner ads.
• Click through rate. With this, the advertiser determines the ratio of page views versus clicks received. This is the percentage of website visitors who really did click on the banner ad. It is unusual for click through rates of websites to surpass the 1% mark.
• Page views. This measures how many times the server has been asked to produce a certain webpage. Advertisers use page views (or page impressions, as they are also known) to estimate the number of visitors who might have glanced at the banner ad, and thus were exposed to it. Usually, banner ad space is sold by the cost per thousand impressions - CPM, in other words.
• Clicks or click throughs. This simply means the advertiser may buy ad space from a site on a pay-per-click basis; if no one clicks on his banner ad, he does not have to pay the host website.

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