How to improve the conversion rates of banner ads

DSM Digital School of Marketing - banner ads

In 1994 the first banner ad was placed on HotWired, which is Wired magazine’s former website. It was purchased by a cellular network provider, AT&T, and read “Have you ever clicked your mouse right HERE? You will.” Many people started clicking on banner ads more for curiosity rather than incentivised advertising.

At first the CTR of banner ads was high, on average 78%, until the market crash in 2000. Google and GoTo.com (which is now Yahoo) then turned banner advertising into a performance-based model. Ads started being valued by CTR rather than the number of impressions.

Today, the click-through rates on banner ads is less than 1%. This form of advertising is not dead, as can be seen by the many banner ads that still grace the Internet, but digital marketers have had to become much more original with their banner advertising and delivering ads only to people they rally wan to reach.

The banner ad has been devalued by the overabundance of publishers’ inventory, which clogs up ad networks. CTR is not as critical as brand exposure since supply eventual completely outgrows demand. However, the good news is that there is definitely a way to improve the conversion rates of banners.

A five-second window

In order to increase conversion rates you need to get the attention of the online users within five seconds before they click off the website. Being noticeable with flashy imagery and bring colours does not guarantee conversion

Here are a few tips to get the viewer’s attention and motivate them to click:

  • Words

Choose the right keywords to entice and persuade viewers to click on your ad.

  • Position

Where are you going to position the ad on the page? Think about your target market and their needs. What are you selling? How can you make the most appropriate connection between the content on the page and your banner ad? The more relevant the content on the page is to your ad the more targeted the traffic is to whoever you are selling.

  • Location

Choose the right websites to advertise your products. Brand building through association is critical. Think about your target market’s online behaviour. What websites do they view regularly for news, social networking and planning weekend activities? If you are going to display ads on a specific website regularly, make sure that you make design changes to your banner ad in order to improve the CTR by keeping the ad fresh for online users.

  • Money

What is the amount of money you are prepared to spend on banner ads? The pricing model also affects this decision. Instead of PPC try to use CPA (cost per acquisition) instead to place banner ads. CPA directly influences the profit of the site on which the ad is being advertised so cooperation in providing good results is more likely with CPA than traditional PPC. As with all online advertising, first calculate your overall budget for paid advertising and then decide how you are going to split this across different advertising mediums.

The more trafficked sites – such as news websites, port and entertainment pages – will charge more for banner ads as opposed to new portals. Keep an eye out for new advertising platforms: you might be able to get a more affordable rate as they will be looking to build inventory.

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