How Do Banner Ads Work?

Banner adverts come in different shapes and sizes.

Banner adverts are a popular way to advertise your business online. With a banner advert you can attract visitors to your website from elsewhere, either by advertising your products and services or by promoting a special offer.

What is a banner ad?

A banner advert is just a type of hyperlink, using a graphic instead of text. In its simplest form, a person looking at a website sees a graphic advert (which can include images and/or text), running above, below or to the side of the main content.

When that person clicks on the banner ad, just like a text hyperlink, they’re taken to the advertiser’s website.

More complex banner ads can use sound, moving .gif or Flash animation or video content to be more eye-catching.

Banner adverts can be:

  • very wide and short, running along the top or bottom of a page – these are the traditional ‘banner’ shape
  • an even bigger version or the banner called a ‘leaderboard’
  • very long and thin, down the side of page – these are also called ‘skyscrapers’.

How do I get my banner ads seen?

Banner adverts are displayed on other websites. There are three basic ways to make this happen.

  1. dealing with websites directly
  2. joining a banner ad network – these work like a ‘broker’ between advertisers and websites that want to show adverts
  3. joining a banner advert exchange program – where you agree to show adverts on your website in return for your ads being shown elsewhere

How do I pay for banner advertising?

Banner advertising usually works on a ‘cost per click’ (CPC) basis. This means you have to pay the website displaying your advert a small fee for every person that clicks on it.

Otherwise, you might pay for each time the banner ad is shown, whether or not someone clicks on it. This is called ‘cost per impression’ (CPI).

In a banner exchange program you don’t pay – you have to show other people’s banner adverts on your own website for free instead.

How do I know if it’s working?

To work out how successfully your banner ads are performing, you can look at:

  • the number of times your advert is displayed
  • the percentage of people seeing your banner ad that click on it
  • the percentage of visitors that convert to being customers as a result

By looking at these measures and comparing how much you spend on banner advertising to the value of business you get as a result, you can work out your return on investment.