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Comparing Online Banner Advertising to Other Web Marketing

Compared to the cost of print media, online banner advertising — with the additional benefit of easy tracking — looks like a bargain. Indeed, some of the growth in Internet advertising historically has come at the expense of newspapers and magazines.

The following illustration shows the allocation of U.S. advertising dollars from 2009 projected through 2015; in 2010, online advertising reached a record amount of nearly $26 billion and is likely to reach $28.5 billion in 2011. Note that Internet advertising overtook newspapers by share in 2010.

[Credit: Source: eMarketer (www.emarketer.com)]
Credit: Source: eMarketer (www.emarketer.com)

The 2010 “Internet Advertising Revenue” report, from the Interactive Advertising Bureau (IAB) breaks down spending on online advertising by type. PPC search comprised 46 percent of online ad spending, compared to 24 percent for static banner ads.

This report distinguishes additional types of banner ads, separately reporting lead-generation banners that offer webinar registrations or downloads of white papers to acquire prospects’ contact information (5 percent), video banner ads (5 percent), and rich media banners that include animation, audio, or interactive elements other than video (6 percent).

One of the more complex aspects of online marketing, paid banner advertising is tantalizing and seductive but not always the most cost-effective use of your money. With a “good” return of CTR hitting only 0.5 percent, most banner ads produce only one-quarter to one-third as many clicks as the same amount of money spent on PPC search marketing.

If you decide to spend on banner ads, use clever planning to increase the click-through rate. In particular, you must target ads more carefully by audience, site choice, above-the-fold placement on the page, and context. Although rich media and video ads generally have higher click-through rates, they also cost more to produce.

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