Banner ads just don’t work … so they say!

Submitted by Dmitri Davydov on Sat, 2007-04-07 07:54.
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If you ask me, this is a huge fallacy – I currently have web ad placements returning over 800% ROI. Imagine being handed eight bucks for every dollar you spend! So obviously it would take a lot to convince me that web media doesn’t work.

But not all web media is created equal. As a responsible web marketer, you can’t listen to what they say. You have to find out for yourself! And this means testing.

As a smart direct response marketer you need to allocate time and money to testing not only ad copy, ad layout, offers and prices. You also have to test media. Because in the web marketing world your media is your traffic driver … the catalyst that brings potential prospects to your doorstep.

Web media can be many things … and unfortunately it’s not quite so cut and dry.

Come closer my child …

To start, we’ll break web media down into two categories. The first category is the more passive of the two … in that these ad types require the prospect to come to the site to be seen.

Passive categories consist of:

Banner Ads

I’m sure everyone knows what a banner ad looks like. They are all over the web and come in many shapes and sizes. Banners ads are sold by the impression on a CPM (cost per thousand) basis so the larger quantity of impressions you can buy the more potential prospects will see your ad. Banners tend to have a lower CPM in comparison to most other web media.

The key with banner ads is to create ad copy that is compelling enough to get the prospect to click away from the site they’re visiting to check out what they know to be advertising.

We’ll talk a lot more about banner ad creation strategies in upcoming issues of In the Net Trenches, but suffice it to say most online big brand advertisers are doing it all wrong.

Sponsored Headlines

Sponsored headlines are one of my favorite ad positions and can work very well for a product that is topical or newsy … such as ones in the financial or health markets. Sponsored headlines typically appear on more news oriented sites and simply mimic a headline that might appear on a website for a news story. Often, they are relegated to a section of a website that is classified as advertising, special offers or sponsored offers.

The power of a sponsored headline is that it is static for a specified period of time, so it is not shown on an impression basis … this means they can get huge amounts of viewership depending on site traffic. And because sponsored headlines look like news headlines, they are often mistaken for website editorial and so they have much higher click through rates than banners.

Sponsored headlines are typically sold on a flat rate basis based on how long they run – such as per week or per month. But note: some sites may actually classify their headline ads as a text ad.

Text Ads

Text ads tend to be the smallest ad size on a site and the cheapest. They are often relegated to the bottom of a page like a classified ad. They tend to have the look and feel of a Google pay-per-click ad and can usually be found in groups. As the name implies, they consist of all text. Some text ads will also allow a small image to be displayed next to the text.

Text ads are typically the least expensive web media available. They are sold on an impression and a flat rate basis. They are most often static -- which means they have the potential to get very high viewership.

I will stress that text ads can be a mixed bag as far as performance. The benefit is they tend to look like editorial and because they are in-expensive it may take far less to make them break even.

If you love him set him free …

The next category tends to be more active in that they are pushed out to the prospect.

Active categories consist of:

Newsletter Sponsorships

Newsletter sponsorships or newsletter ads are found in a company’s e-newsletter or e-zine. The e-newsletters are sent to the websites opt-in subscribers by e-mail. The ads appear within the actual newsletter issue. Ads can take the shape of a banner ad or a text ad depending on the newsletter.

Newsletter ads are often limited to one ad sponsor per issue. So there is far less competition for attention in an e-newsletter. Plus, with only one ad sponsor per issue you get a measure of implied endorsement from a company that your prospect may already trust or even be doing business with.

Open rates tend to be higher for e-newsletters than for other types of paid e-mail. But the downside is you are in competition with the e-newsletter editorial, so it’s important to have interesting and compelling copy to entice the reader to click away from the newsletter.

Newsletter ads run the gamut in pricing from extremely cheap to extremely expensive and are typically sold on a CPM (cost per thousand) or flat rate basis.

Newsletter advertisers can expect to have the majority of their ad responses within about 48 hours of the newsletters delivery. But, e-newsletters tend to hang around in prospects inboxes and I’ve seen orders from newsletter sponsorship ads as much as 3 months later.

E-Mail Marketing

There are two different types of e-mail lists – response and compiled.

Response e-mail lists tend to be the most expensive of all the categories we’ve covered today and the most effective. They are also one of my favorites and the closest to direct mail.

Response e-mail lists are made up of customers or opt-in subscribers that have all responded to a specific offer. They have either purchased a product, opted-in to receive an e-newsletter or to receive special information from one particular business.

Response e-mail lists are sent from the list owner to the prospect on behalf of the advertiser, thus are immediately recognizable as being from a company the prospect is familiar with. This makes these prospects warm to your offers.

Compiled e-mail lists tend to be dirt cheap in comparison to response lists. They are made up of broad categories of people across specific demographic or psychographic categories. Since prospects often don’t know how they ended up on a specific compiled list, e-mails can easily be mistaken for SPAM. This makes these prospects very cold.

Low cost and mass quantity are the key to making compiled lists work in your favor.

E-mail lists are typically purchased on a CPM (cost per thousand) basis but some compiled lists are also sold on a CPA (cost per action) basis.

One key to making e-mail marketing work for you is getting prospects to open your message. Subject lines are an extremely important factor in e-mail marketing and should not be an afterthought in creative development. We’ll spend more time on subject lines in upcoming issues of In the Net Trenches.

One huge benefit of e-mail marketing is that it’s virtually instantaneous -- you will start seeing response immediately and the majority of orders will come in within the first 24-48 hours. Also like newsletter sponsorships, e-mails tend to hang around in your prospects inbox for some time and I’ve seen responses continue to trickle in months later.

Clayton Makepeace,

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