Are Banner Ads Effective?

Banner ads have been around since the early days of the internet, and they’ve shown amazing staying power—especially when considering how many people declared them dead more than a decade ago. Yet, banner advertising continues to be a mainstay of digital marketing and online advertising.

After a period of decline, spending on banner ads has grown dramatically over the past few years. Digital advertising spends on banner ads is forecast to top $158 billion worldwide in 2022, a 12.7% increase over 2021 spending and more than double the amount spent in 2017.

Advances in adtech have resurrected banner ads. Programmatic engines can now hyper-target audiences to deliver relevant content that resonates with users. By providing consumers with banner ads that align with their interests and behavior, today’s generation of banner ads is far different than those of the past.

In this article, we’ll go in-depth about how banner ads work, what features that are no longer seeing results, and advertising techniques and tools that have started to take their place.

What Are Banner Ads?

Banner ads are a form of online advertising to display image-based ads on a webpage. By placing banner advertising on sites that deliver the volume and targeting that advertisers want, banner ads help build brand awareness.

In the early days, publishers often placed banner ads as a way to get someone to accidentally press on them, so a click would be registered, and they would get paid. This gave banner ads some bad PR. While accidental clicks do still happen on occasion, new rules and regulations have stopped this practice. Measurement and tracking tools are also significantly more adept at recognizing inadvertent clicks or invalid traffic.

Common Banner Ad Sizes

You’ll see all sizes and placements of banner ads as you visit various websites. Here are the most common ad formats and sizes you are likely to encounter:

  • small square 200 x 200
  • square 250 x 250
  • banner 468 x 60
  • leaderboard 728 x 90
  • inline rectangle 300 x 250
  • large rectangle 336 x 280
  • skyscraper 120 x 600
  • wide skyscraper 160 x 600
  • half page ad 300 x 600
  • large leaderboard 970 x 90

Banner ads have also grown in popularity alongside social media. There are different sizes for banner ads on Facebook, Instagram, and other social platforms.

Banner Ad Placement

Banner ads are part of programmatic advertising and fall under native display advertising. They are typically placed at the top, bottom, or side of a webpage in a banner format, as the name suggests.

For publishers, ad placement is important. Small ads that are buried below the fold or tucked away are less appealing to advertisers and less likely to generate clicks. By optimizing ad placements, publishers can significantly increase their revenue. But although placement can have a large effect on a publisher’s revenues, it’s not the only thing that affects overall income.

How successful a banner ad campaign is will depend on multiple factors—some of which the publisher has no say on at all, like the ad design. Advertisers need strong creatives that grab people’s attention, with engaging messaging and a strong call to action (CTA) to deliver solid click-through rates (CTR). When advertisers do these things well, digital marketing can generate significant conversions for both parties.

Learn more about how placements impact revenue generation by reading our post, What Ad Placement Types Generate the Most Revenue.

How Ad Revenues Work

When publishers place banner ads on their website, they generally earn money in one of two ways: CPM or CPC.

CPM stands for cost per mille, or cost per thousand impressions. Ads are priced based on a rate per every one thousand impressions.

CPC stands for cost per click. Publishers earn revenue every time a user clicks on a banner ad.

While publishers can sell directly to advertisers, most also take advantage of programmatic ad networks to generate largely passive income. Programmatic advertising automates the selling and buying process by matching advertisers with targeted audiences on publisher sites and serving relevant ads in real-time.

For both advertisers and publishers, this simplifies the process. Once publishers choose an ad network and place the code on their site, everything else happens automatically.

What Issues Are There with Banner Advertising?

There are some issues associated with banner advertising that you need to be aware of.

Ad Blockers

While it’s difficult to pin down the number of internet users that deploy and use ad blockers, their use has become an issue for advertisers trying to reach consumers and publishers trying to generate revenue.

If you are looking online for ad blocker usage statistics, you’ll see a wide disparity. Some put ad blocker usage in the US at 40% of internet users. However, you’ll also find reports that show ads being blocked in practice can be as low as 7% to 18%.

Due to ad blockers, users can simply bypass ads, and no revenue will be made regardless of how much time is spent on ad design, matching content to the audience, or placement. Ad blockers cost publishers more than $35 billion annually in lost revenue. However, there are strategies publishers can deploy to recover lost revenue from ad blockers.

Banner Blindness

People have been trying to avoid advertising for as long as it’s been around. People skipped past newspaper ads without reading them, changed radio stations when a commercial started or fast-forwarded through TV shows when they could.

Online also suffers from banner blindness, or ad blindness, where website visitors simply ignore the ads on the page. Because people generally access a web page looking for specific information, internet users are usually focused on the information rather than the ads. People get so used to seeing ads that they may not acknowledge them.

Advertisers and publishers can work together to fit banner blindness by using creative ads, ad formats, and banner ad sizes that stand out. A compelling ad or offer can still enhance brand awareness and increase the effectiveness of online marketing.

Online Bots

There’s also continuing concern about fake traffic, impressions, and clicks. Hackers have created bots that are designed to locate banner ads and interact with them. These bots generate clicks from a digital ad, which can mean publisher earnings are not accurate.

Unscrupulous operators also create fake web pages designed only to show ads, which bots click on to inflate metrics and defraud advertisers.

Fortunately, the AdTech industry has taken significant steps to reduce and eliminate bot clicks. The Trustworthy Accountability Group (TAG), a coalition of leading online companies, has taken the lead in improving traffic sourcing transparency. TAG requires publishers to use an ads.txt file (Authorized Digital Sellers) to be certified against fraud.

The Coalition for Better Ads has also created a set of standards that premium publishers adhere to. Not only do these standards help reduce fraud, but they also create a set of best practices that generate more conversions and perform better overall for advertisers and publishers alike.

Do Banner Ads Still Work?

Despite these issues, banner ads work, and they are not likely to go away anytime soon. Effective banner ads still generate conversions and will continue to be part of the digital advertising mix for online marketers.

In the early days of the internet, banner ads were novel and generated significant clicks. Today, the average banner ad has a clickthrough rate hovering around 3% in 2022, which varies widely based on industry and types of ads.

Still, with so much revenue and opportunity available, advertisers and publishers can deploy strategies for webpage banner ads to make advertising more effective.

How To Make Banner Ads More Effective

Even with all the challenges involved in digital advertising, effective banner ads are still a viable option for advertisers and publishers. Publishers can work to optimize ads to generate the highest possible ad revenues.

For advertisers, a marketing strategy that creates eye-catching banner ads and video ads with dedicated landing pages for each marketing campaign has proven to improve performance. Audience targeting significantly improves effectiveness by matching relevant ad content to the right target audience.

For publishers, you can refine how and where you deploy ad units to maximize revenue opportunities, whether you are placing ads on your homepage or other web pages. For example:

  • Some ad sizes convert better than others. The most commonly used ad size is 300x250px, but what works on your site may be different. You should always be testing different ad units for effectiveness.
  • Make sure your site allows ad placements in ideal locations. While you do not want to disrupt the user experience, you have to make sure your ads get seen and noticed.
  • Publishers should avoid putting too many ads on any individual page. This can diminish the effectiveness of ads and impact website visitors’ impression of your site. They may equate too many ads with poor-quality content.
  • One of the most important things you’ll need to do to optimize revenue is to target ads to relevant audiences. When user behavior indicates an interest in certain content, in-context and targeted ads for those users and more effective.

Publishers should also run frequent ad optimization tests to try out new combinations of ad content, location, size, etc. to find the highest-revenue-generating combinations. The right AdTech partner can help by identifying the best-performing ads and ad units.

By balancing the user experience and ad placements, you can provide a high-quality UX and improve your revenue generation.

How Much Money Can You Earn with Banner Ads?

Banner ads no longer generate the 40% click-through rates that were common in the early days of the internet. Ad blockers, banner blindness, and bots have impacted their effectiveness. However, publishers can still generate significant income and grab a large share of the ad spent on digital media by deploying marketing strategies to optimize the effectiveness of banner ads.

By placing an ad network code on your site, you can create a generally passive income stream by letting our team here at Newor Media go to work for you!

Want to see how much additional money you can earn?  Check out Newor’s website earnings calculator.

Dario Osowski

Senior Account Manager, Publisher Development: Newor Media

Dario is an ad tech superhero who is innovative and has solved complex technical and business matters that have generated high revenue growth for publishers. He has a strong technical background, provides technical concierge support, is highly analytical and solution-oriented. Dario currently works at Newor Media, where he provides technical and business support and solutions to publishers to generate the best revenue growth outcome in yield optimization management in the programmatic universe.