Marketing on the internet and banner ads in particular is probably the most misunderstood form of marketing and advertising that businesses use today. The small business understands seeing their ad in print because they can actually put their hands on the hard copy of the advertisement. But when asked about banner ads, they generally, don't even know how to explain it or even the terms that are involved in the process.
Internet marketing is composed of terms such as CPM, CTR, Tag lines, Run of Network and all the other terms specifically associated with banner ad campaigns. These terms alone can scare off the most sophisticated print ad professional. A brief explanation of what some of the terms stand for and what they really mean is in order for the first time purchaser of banner ads.
CPM stands for Cost Per Thousand. It means that you have a rate of $X dollars per 1,000 banner ads displayed. Typical rates for banner ad rates run from $8 per thousand displays to $30 per thousand displays. The price range is all dependent on the target market that is being reached with your banners. The low end rate will get you 1,000 banners placed on sites all over the internet. Sites ranging from computer related information to sewing clubs. As a result you may or may not even have a single banner displayed to what you might consider a good candidate for your advertising. The higher up the price range the narrower your target market becomes. Large portal sites such as Yahoo, Excite and AltaVista have prices in the upper ranges, yet you still do not get the targeted market. They can demand the upper prices because they are large and popular, similar to network advertising on television.
CTR stand for Click Through Rate. It means the percentage of your banners that are actually clicked on per 1,000 banners shown. The industry average is a click through rate of .25% to 1%. Again, depending on how targeted your market is for your particular banners. A very targeted market may have a CTR in excess of 1% but anything over 7% is almost unheard of. Many advertisers expect a zero CTR, as they are using the banners to create name recognition and not to actually generate sales. Same principal applies to print advertising, the more you advertise the better your name recognition is and the more likely that you shall receive that call for your product or service.
Tag lines stand for a one to five word description that is also displayed under the banner advertisement. Such as "click here". Many banners do not include a tag line at all, as most sites have something similar such as "support our sponsors" or something similar.
Banner advertising is generally displayed across a whole network of web sites and very rarely just one website. To concentrate on one website is possible but in most banner organizations it is cost prohibitive.
The purpose of banner ads is to increase sales obviously. How this is accomplished is by the use of banners for a variety of purposes. Banners are an important component in a marketing mix to increase your brand identity, name recognition that will result in increased revenues. And if you are able to target a market that you are interested in, then the quality of the prospects in this highly targeted audience will increase your not only your banner penetration but any other marketing you do in other mediums. Creating name recognition with banners will increase the recognition of your print advertisements.
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