Though a banner space is small it serves multiple purposes for an advertiser — It is
ad message of
company/website,
— Allows visual display of
company name, logo and
product
— It is
click-through device
— it is a concise sales pitch that can trigger customer click-through
— It is
key for
affiliate tracking mechanism (if you run an affiliate program)
What’s
point of banners if clicks are declining?
At
turn of
century it seemed like it was all over for banners when research showed that click-through rates had dropped to 0.5% or less from a level of 2-3% in
1990’s. Fortunately there was also research that showed that banners play a big role in improving brand awareness on
net. In fact, despite
finding that click-throughs are falling one yardstick that gives us some insight that banners are still effective - is
affiliate program concept. It is well known that affiliates make a significant contribution to
Internet economy and as we all know, affiliate programs use banners as
main advertising format. This implies that banners continue to work even at
reduced click-through rates and have probably stabilized at this level after
heightened interest in
initial years of
net.
If we draw parallels with
paper mailer based direct marketing industry,
lessons learnt in direct response marketing show that
expectations in terms of response rates should be realistic and as a percentage of total mailers sent out,
response is actually as low as 0.5%. It is therefore not surprising that click-throughs on banners which is
online equivalent of an initial response to
ad are also at similar levels.
The point to be borne in mind is that banners still make business sense especially due to their ability to create brand awareness and maintain brand visibility.