What is Targeted Banner Advertising?

Do you own an online store? Are you thinking of ways to entice more customers to purchase from you? Learn about how targeted banner advertising can help you.

There are various ways in which entrepreneurs can make money on the World Wide Web through their websites. Most revenues earned by websites are through advertising, and one form in particular that stands out is banner advertising. These days, targeted banner advertising is all the rage. But before we can discuss banner ad targeting, we must begin with the basics of banner advertising.

What is a Banner Ad?

Investopedia.com defines banner advertising as “a rectangular graphic display that stretches across the top or bottom of a website or down the right or left sidebar. The former type of banner advertisement is called a leaderboard, while the latter is called a skyscraper. Banner ads are image-based rather than text-based and are a popular form of website advertising. The purpose of banner advertising is to promote a brand and/or to get visitors from the host website to go to the advertiser’s website.”

How Banner Ads Work

There are a number of ways that banner ads can be successful:

  • Clicks/Click-throughs: This refers to the number of people who click on the banner ad that links to the advertiser’s website. Host websites sell banner ad space on a cost-per-click (CPC) basis.
  • Page views: Also known as page impression, this refers to the number of times a web page has been viewed. The most common way to sell banner ad space is cost per thousand impressions or CPM.
  • Click-through rate: This refers to the ratio of page views to clicks.
  • Cost-per-action: This refers to the payment that an advertiser must pay to the host for every visitor that clicks on the ad on the host’s website, goes to the advertiser’s website and either fills out a form or purchases an item or service.

Understanding Banner Ad Targeting

Simply put, when a website serves up a banner ad that corresponds with the interest of the visitor, that’s called banner ad targeting. Retargeting or remarketing, as this is also called, works by marking or tagging consumers who visit a certain website with a cookie, which then allows them to serve banner ads only to the visitors who have shown some a level of engagement with the website’s products or services.

For example, you run an ecommerce website that sells infant products and a potential customer views car seats and high chairs, but then he or she leaves your online store without purchasing anything. With the help of remarketing, your website will leave a “cookie” in the potential customer’s browser, allowing you to serve up targeted banner ads on participating websites that he or she visits. This means that you can continue advertising the car seats and high chairs and other similar products to the consumer.

While it’s true that most consumers perceive online ads on the websites that they visit as annoying, many studies show that if they must see ads at all, targeted ads are preferable to untargeted ads. However, many online users and advocacy groups have voiced their concerns about privacy issues posed by targeted ads. The one thing to remember is that this type of advertising does not store any personally identifiable information.