How Banner Ads Work

Selling banner advertising space is a great way to use your site's traffic to generate revenue, but it can be a bit tricky. The easiest option is to join a banner ad network, which will recruit advertisers, keep track of your earnings, and control banner ad placement on your site. In exchange for these services, the network will take a hefty percentage of the advertising money generated by your ad space.

Because there are more sites that want to sell advertising space than there are sites that want to buy advertisements, banner networks tend to be somewhat choosy about the publishers they recruit. Most banner networks set a minimum monthly traffic amount, which is often fairly high. A lot of the bigger banner networks require publishers to have upwards of 250,000 visitors a month to join a CPM program. Many banner networks do cater to a range of sites, setting up different tiers to divide publisher sites based on monthly traffic. This is a good service for advertisers because it lets them choose the range of sites that best fits their budget and marketing campaign. Additionally, most banner networks put certain restrictions on publisher site content. They may exclude sites featuring adult content or socially offensive material, and they may also exclude publishers that already feature too many advertisements.

If your site gets a good deal of traffic, more than 100,000 impressions per month, then you should be able to join a good banner network's CPM program. If you have a smaller site, you should look into banner network click-through programs, which tend to have lower minimum traffic requirements. You probably won't make much money in a click-through program, however, because you are only paid when visitors actually click on the banner, which is very seldom (typically, less than 1 percent of the people who see a banner will click on it).

Once you've joined as a publisher, banner networks operate very similarly to banner exchange programs. You put a piece of HTML code in the ad space on your site and the banner network takes care of the rest. They place banner ads they feel fit your site and track the relevant impressions or click-throughs so you will be paid correctly. As with exchange programs, you will probably end up with unsuitable banner ads on your site from time to time, and you won't get a whole lot of control over the process.

How much money might you make through a banner ad network? Most networks are selling "run of site" ads to advertisers, and they are getting something like a $5 CPM rate for the ads. Then the network takes between 30% and 50% of the $5 as its cut. Therefore, you might expect to earn something like 0.3 cents per impression that appears on your site, or a $3 CPM rate. If your site generates 100,000 impressions per month, you can expect to receive a check for $300 every month.

If you are getting paid per click, you might receive anywhere from 3 cents to 20 cents per click. 5 cents might be a typical average. If you get a 1% click rate and you have 100,000 impressions per month, that means that you might expect to receive $50 per month.

Selling Space Yourself

If you want total control over the banner ads that appear on your site, you may want to recruit advertisers yourself. There are many more sites on the Web that want to sell ad space than there are advertisers, so you need to have a fairly impressive site to go this route. The things that impress advertisers are high traffic and specialized content, because these are the things that translate into impressions and high click-through rates. If you want to sell ad space, your task is to convince potential advertisers that placing a banner ad on your site is a good investment. You do this with traffic numbers, information about your visitors (called demographic data) and with specific content that relates to their product or service. Since you won't be using a network or exchange program, you'll also have to set up technology to track visitor traffic, so you can bill your advertisers correctly. Approaching advertisers, marketing your site, tracking traffic and collecting money from advertisers all require a lot of time and effort, but if you are committed to growing your Web site and only running banner ads that would appeal to your visitors, the payoff can certainly be worth the effort.