In Dotcomology many aspects of making money online are looked at. That’s why it is called the science of making money online. One fast way to generate traffic and sales is to pay for advertising. In the next several posts we will look at various ways you can buy advertising and keep customers.

Banners

When the Internet first started, banners were all the rage. Today, they’re pretty much passé. They’re no longer a novelty and unless they’re super-clever, users pretty much ignore them. Conversion rates have dropped through the floor and many advertisers have found other ways to promote their products.

And yet, every website still contains a whopping great banner ad splashed along the top or running up the side. In part, that’s because they’ve become more sophisticated with better targeting and improved graphics. But in practice, banner ads tend to be used for one of two reasons: to attract traffic to one’s website; or as a way of visually branding your business in the mind of the public.

The key with banner advertising is always to make sure the economics make sense. We’ll look closely at the math in this chapter, but before we go on to talk about the math of banner ads and how to tell whether your banner campaign is worthwhile, let’s just take a look at the terms involved. You’re going to see these words whenever you join an affiliate program or take part in any other kind of online marketing plan. You should definitely be familiar with them.

..Banner Ad — A graphic ad linked to an advertiser’s website. These usually run across the top of the page but
can also run up the page (“skyscrapers”). Banners are usually limited by size.

.. Banner Views — The number of times a banner is seen by users. This is usually the same as “page views”, but counts the number of times the banner is actually downloaded rather than the number of times the page is downloaded. Some users click away before the banner finishes loading.

.. Clicks/Click Throughs — Banners are operated by clicking the cursor over them. Not too surprisingly these responses are called “clicks” or “click throughs”.

.. Click Through Rate (CTR) — The percentage of users who see the banner and click on it.

.. Conversion Rate — The percentage of people who visit your site and actually give you money. The higher the better!

.. Cookies — Small files placed on a user’s computer. They’re used for all sorts of reasons and by all sorts of sites. Banner ads use them to make sure the user hasn’t seen the banner recently, which banner brought them to the advertiser’s site, and even which ads they’ve seen recently.

.. CPM — “Cost Per 1000 Impressions” The amount you pay for every thousand times a banner is shown. This is the most common way of charging for banners.

.. Hits — The number of times a server receives a request for a web page or an image. Not a great way to measure interest. One page can have lots of images and get lots of hits, even if it’s only seen once. Often, people will say “hits” when they really mean “page views” or “impressions”.

.. Page Impressions or Page Views — The number of times a web page has been requested by the server. Much more accurate than hits: each view is a potential customer looking at a page of your site, but not necessarily a different customer.

.. Unique Users — The people who download a web page, counted by IP address. You want to bring lots of users to your site so that you can create a broad customer base. The same user clicking on a banner a dozen times could cost you money without increasing your sales. Most reputable sites will check the IP address of the person clicking on a link and only count it once in a 24-hour period. If a site doesn’t do this, don’t advertise with them.

Tomorrow we will look at how to calculate if your banner advertising is cost effective. That is done buy understanding the cost per visitor and the cost per sale.