A Practical Guide to Banner Advertising

The first banner ad, an AT&T spot that ran on HotWired in 1994, reportedly pulled a click-through rate somewhere around 44 percent. Eight years later, a well-run campaign is thrilled to clear half a percent. That collapse tells you almost everything about where banner advertising stands right now: the novelty is entirely gone, budgets are far tighter than they were two years ago and the ads that still work are the ones built around that reality rather than around 1990s expectations.

The market advertisers are buying into

The advertising downturn that followed the dot-com crash hit banner spending especially hard, since so much of it had been funded by the same startups that no longer exist. What’s left is a smaller, more disciplined market, and buyers are pushing back harder on rates than they did in 1999 and 2000. That’s not entirely bad news: it means the sites and networks still selling banner space have real incentive to prove the format still delivers, and pricing has come down to a level that makes testing far less risky than it used to be.

A standard worth knowing: the new IAB sizes

For years, every publisher ran a different set of banner dimensions, which meant an agency had to produce a new creative size for practically every site on a media plan. The Interactive Advertising Bureau addressed this earlier this year with its Universal Ad Package, a small set of standard sizes, including the 728x90 leaderboard, the 300x250 rectangle and the 160x600 skyscraper, that most major publishers are now adopting. Building creative to these dimensions from the start saves real production time and is quickly becoming the sensible default rather than the exception.

The pop-up problem

Pop-up and pop-under ads have become one of the most contentious formats in advertising, precisely because they’re effective at forcing attention and deeply resented for it. Users are increasingly installing pop-up blocking toolbars, and the backlash is real enough that some publishers are pulling back from the format even though it still sells at a premium. Anyone weighing pop-ups against standard banners should factor in the brand cost, not just the click-through numbers, since irritation doesn’t show up cleanly in a campaign report.

The DoubleClick lesson on data

DoubleClick, the ad-serving company behind a huge share of the banners on the web, spent the last two years fighting off a serious controversy over a plan to merge the anonymous browsing data it collected through ad delivery with real names and addresses from a catalog marketing database it had acquired. Regulators and state attorneys general pushed back hard, and the company backed off the plan and settled the resulting investigations. The lesson for any advertiser buying banner space through a network is worth remembering: know what data the network collects on your behalf and how it’s used, because scrutiny of that practice isn’t going away.

What still works in banner advertising

• Simple, legible creative beats clever creative. A banner glanced at for a fraction of a second needs one clear message and a clear next step, not a clever multi-panel animation.
• Rich media and Flash units, used sparingly, still outperform static GIFs on engagement, though they cost more to produce and some users find them intrusive.
• Frequency matters more than reach on a fixed budget. Showing the same person a banner five or six times across a session builds recall better than spreading the same impressions thin across a huge, mostly indifferent audience.
• Placement context still counts. A banner on a page relevant to the product performs better than the same banner bought cheaply on unrelated remnant inventory.
• Judge banners on more than the click. With click-through rates this low, a campaign that moves brand awareness or site traffic without generating many direct clicks may still be doing its job.

Setting expectations correctly

Anyone buying banner space today should walk in expecting low click-through rates as the norm, not a sign of failure. The format’s real value now sits closer to awareness and reach than to direct response, and campaigns planned and measured with that in mind tend to hold up far better than ones judged purely against the click rates of 1996.