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.
What do banners do for brands?