Well, contrary to popular belief, banner ads are NOT dead, and can produce a significant amount of traffic, IF you know how to make them work.

The best sort of banner is a simple 'invisible' banner popularized by Scott Covert with a direct response type, benefit laden headline that blends in and looks like part of webpage instead of a blatant banner that screams 'banner ad!'.

Note: Avoid flash, gaudy graphics and colors at all cost.

Now, check out my top 10 'Psychological Triggers' to get that elusive banner 'clickthrough'.

1. The words on your banner should 'hook' and lure reader to take action. Adjectives are known to be very attractive,words like scorching, starving, sizzling, powerful, etc. The words you use should really accentuate benefits in your offer.

2. Make a discount offer on your banner ad. People are always looking for good deals. You could offer a percentage discount, dollar discount, buy one get one free discount, etc. But do always remember to justify your discount with "reason why" and make sure to NEVER devalue your product.

3. Advertise a trial or sample offer. This will tell people there is no risk or obligation if they click on your banner ad and try out your product or service. A 'try before you buy' risk reversal approach has been proven to be extremely effective, as postulated by Claude Hopkins in marketing classic, Scientific Advertising.

4. You could advertise a free offer on your banner ad. People love free stuff. The freebie should relate to your target audience. If freebie is attractive to them they will click. FREE, is one of most powerful words in advertising. Bait them.

Pay Per Performance Advertising could cover several things, such as pay per click advertising,

This type of Pay Per Performance Advertising means that, you list your website in a pay per click search engine, and when someone types in your term and clicks on your website listing, you are charged a fee for that click.

Another type of Pay Per Performance Advertising could be pay per subscriber. What this means is that you will pay a fee for every subscriber that is sent to you through a subscription form.

There are many types of Pay Per Performance Advertising but ones above are most common, especially pay per click.

Pay per search is another one. This was done by ask jeeves.com a few years ago, I'm not sure if they still do it though. What basically happened was you would put an askjeeves search box on your website, and whenever someone searched askjeeves through your website, you were paid a small amount each time.

Not recommended for small websites with little traffic. The return just wont be worth it.

Pay per impression is another one. This is quite rare though, or at least it should be. I don't think many, if any websites do pay per impression any more, it's so expensive and easy to make fraudulent impressions. However, in some places CPM is quite popular. This means cost per thousand impressions. So say CPM was $5, this would mean that for every thousand people that saw your advertisement you would pay $5.

Out of all of above, I would much prefer paying for every action taken. This way I get what I want, and there is less chance of fraud happening, which is just a waste of my time and money. Sure it costs more, but I think results are well worth it.