How Banner Ads Work

If you are interested in buying advertising space, you have a few different options. You can:

Each of these options has its own advantages and disadvantages, as we will see.

Approach Web Sites Yourself

This is an involved, time-consuming way to place your banner ads, but it does offer some significant advantages. Mainly, placing all your banner ads yourself gives you a lot of control over how you advertise. You can fully investigate potential publisher sites to decide if their content matches yours and you can often work with the site to find the best location for your ad. This can be a relatively inexpensive way of advertising, if you target small Web sites that don't attract a lot of other advertisers. If you choose such sites carefully, your banner ad can be fairly effective. A small Web site that caters to a particular niche may not have very high traffic, but the people who do visit are all interested in some of the same things. If you sell rare PEZ machines, for example, a well-placed ad on a small toy collector site could bring you significant traffic.

To place advertisements this way, you have to approach each site individually, follow its particular procedures and purchase its particular advertising packages. Start by searching the site to see if they have a page for potential advertisers. If you can't find anything online, call the site or send them e-mail. Shop around for an advertising arrangement that meets your needs and fits your budget.

Larger sites will probably have a set advertising package with a relatively high price tag. Most sites sell advertising space on a CPM basis, in a package consisting of a certain number of impressions. CPM varies considerably -- you can expect to pay anywhere from $5 to $100 per thousand impressions on a fairly popular site. There is such a wide range because different Web sites have different levels of popularity and different sorts of audiences. A site with consistently high traffic will usually charge a lot more than a less popular site. If a site caters to a particular niche, it may charge more than a general interest site because its advertisers can more effectively target a specific demographic. The amount of impressions in an advertising package varies, but 50,000 to 200,000 impressions sold at a time is typical of good-sized sites. Smaller sites may not have any advertising plan whatsoever, which means you might be able to work out a good deal with them.

Employ an Advertising Agency

A full-service advertising agency will do most of the work of posting banner ads for you, and it will lend its expertise to the process. Agencies help you seek out suitable publisher sites, they negotiate the price of banner ad space, and they help you make the best use of your advertising budget. Additionally, advertising agencies work with you to conceive advertising campaigns and they create professional banner ads for your site. They can often get a better price on advertising space because they have a lot of clients and can buy impressions in bulk. There are many good Internet advertising agencies, offering a wide variety of special services.

It's clear that using an advertising agency has a lot of advantages, but it also has one significant drawback for smaller sites: Advertising agencies usually deal only with accounts of a certain minimum size. Agencies vary considerably in reputation, services offered and size, and so also vary a great deal in price and account minimum. The best way to find out if an ad agency is right for you is to shop around. Find out what an agency offers, how much it charges and how much experience it has. Look at several agencies so you can make an informed decision.

The cost of using an agency is certainly worth it to very large companies because they need the expertise and talent of professionals to make their ads competitive with rival companies' ads. It may be a necessary investment for a smaller Web site too, if it wants to establish itself as a significant presence on the Internet. Advertising is a very difficult process and an important ad campaign is certainly best handled by experts. If you have a limited advertising budget, however, you might do better to spend most of your money on actual banner ad placement, rather than marketing plans and top-of-the-line banner design.

Join a Banner Ad Network

If you want to place your banner ads on a lot of sites and don't want to put in the time to negotiate with the sites yourself, then using a banner network is a good option. Banner ad networks simply act as brokers between advertisers and publishers. Like banner exchange programs, they take care of placing an advertiser's banner ads and tracking all activity related to that ad. They also share one of the main drawbacks of banner exchange programs, however -- a lack of client control. Banner networks decide where to place banner ads, and they don't give each client the level of attention an advertising agency would. Consequently, there's a good chance you won't always be happy where your banner ad gets displayed. Many Web sites happily accept this shortcoming in light of the extensive services ad networks provide at a relatively low cost.

You definitely need to shop around to find a suitable banner network. For one thing, many of the larger banner networks primarily sell advertising space from high-traffic publisher sites, which may be too expensive for your budget. There are banner ad networks that specialize in more affordable advertising space on smaller publisher sites, and a few networks offer discounted "remainder" advertising space, also called excess banner inventory, which is simply ad space that didn't sell at the regular price. You should also check out networks that specialize in a particular kind of site, as they may place your ads more effectively. Unfortunately, there are plenty of banner ad networks that promise more than they deliver and that fail to place your ads effectively, so be sure to research a network thoroughly before you join.

You'll also need to decide whether you are interested in impressions or click-throughs, as most banner ad networks specialize in one or the other.

Some major impression networks are:

Some major click-through networks are:

Start an Affiliate Program

This is a very cost-effective way to get your banner ad on other sites. If you set up your own affiliate program you can arrange to pay publisher sites only when you get a specific result. This could be a number of things, such as a visitor simply clicking through to your site or the visitor actually purchasing something once she gets there. Unlike traditional banner advertising through a banner network, you don't have to buy affiliate program click-throughs or impressions in bulk. You pay a small amount for each click, or you pay a percentage of your profit from a referred visitor. You can learn all about affiliate programs in the How Stuff Work article How Affiliate Programs Work.