What Are Banner Ads and How Do They Benefit Companies?

By Indeed Editorial Team

Published 27 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

In today's digital world, almost all companies use online marketing to engage their target audience and promote their products and services. Banner ads are a popular form of online advertising. Learning about banner ads and how they work can help you develop your essential skill sets as a marketer. In this article, we discuss what banner ads are, explain how they work to benefit companies and share how to create effective banner ads.

What are banner ads?

Knowing what banner ads are can help you decide how to use them effectively in your integrated marketing campaigns. Also known as display ads, they're a popular form of online advertising that use a rectangular graphic display which appears horizontally or vertically on websites or mobile platforms. They're also image-based rather than text-based. These types of ads feature either static or animated images to attract the target audience.

How do banner ads work?

Banner ads work by using visually attractive banners to attract potential consumers. By clicking on them, they're taken to the advertiser's website or desired landing page. Advertisers place banner ads on relevant, high-visibility and high-traffic areas of a website so that more people can notice the advertisements. Depending on the marketing objectives, the use of these ads can lead to greater brand awareness, increased sales, lead generation and sign-ups for promotional events.

Banner ads use real-time bidding technology known as programmatic bidding that allows companies to bid on ad space during the time it takes the banner ad to load. Programmatic advertising uses machine learning and algorithmic software to automatically buy and optimise digital campaigns. This replaces human negotiation and increases marketing efficiency and transparency for both the advertisers and publishers.

What are the pricing models for banner ads?

Pricing structures for banner ads vary across different display publishers. It's common to use either cost per click (price for each ad click) or cost per mille (price for 1000 impressions). Advertisers can choose to bid for ad space using either method, depending on their marketing objectives and budget. Usually cost per click works better for conversion whereas cost per mille works for brand awareness and visibility. Many display networks help the companies to optimise the budget and time frame to get the most out of their marketing dollar.

How do banner ads benefit companies?

Here are some of the ways that banner ads benefit companies:

Shorter planning time

Banner ads are cost-effective and easy to set up using automated display publishers' platforms. This means that marketers require less planning time to use this form of online advertising as compared to traditional advertising. This is very helpful as marketers often make changes and vary the intensity of their campaigns in a short time. For example, a company that is launching a new product the following week might not have enough registered attendees for the event and very often, they increase their banner advertising to boost the numbers.

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Cost-effective

Marketers usually like to use banner ads because they are more cost-effective as compared to traditional advertisements. There are no printing or distribution costs. They're also reusable and companies can save time by just designing once and using them across various websites. Companies often incorporate these ads into their long-term marketing plans because they have a wider reach and cost less to design and execute. Start-up companies that might not have sufficient marketing budget can stretch their marketing dollar using banner ads.

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Brand awareness

Companies can use banner ads on intentionally reputable and high-traffic websites to increase brand awareness. By advertising on such websites, they can build trust, connect to a large target audience and bring attention to their new products and services. Building brand awareness is a continuous effort and regular banner ads can ensure that the brand stays relevant to its consumers.

Increased visibility

Effective banner ads are attention-grabbing and highly visible on websites. This increased visibility creates a strong brand recall and call for action. A company that is promoting a Christmas sale for candles and body lotions can use banner ads to effectively get the attention of last-minute shoppers. This visibility increases with the use of animated banner ads playing Christmas music and candle-lit fireplace images. It lets customers know about their festive sale and helps increase sales and attract new customers.

Lead generation

Companies aim to constantly generate leads to convert more people to buy their products and services. By using banner ads, more potential customers can click on them to visit the company's website, and this can lead to more sales and profits. For example, a university promoting master's programmes has a target recruitment intake every year and to achieve that, they can use banner ads on news websites to attract potential students to their admissions website to further engage them.

Targeted advertising

One of the most important marketing concepts is targeting the right audience. Companies ensure that their product offerings and services attract the right target audience who are the decision makers with spending power. Banner ads allow companies to specify the profile of the audience that they want the ads to be shown to. This optimises the marketing dollar and makes conversion easier. For example, an airline advertising for business class travel targets business travellers or high net worth people and they can place their ads on investing, trading or luxury websites.

Re-targeting audience

Through online advertising, companies have access to data about the visitors' profiles, such as how long they stayed on the page and how many times they visited. Such data helps companies re-target these potential customers by showing them the banner ads again when they browse other websites. For example, if a customer clicked on a banner ad for dog food but did not purchase, the dog food company can show the same customer the same ad on another publisher's website. This repeated re-targeting is subtle, allows the customer to register information and promotes brand recall. Eventually, it encourages purchases.

Measurable

It's easy to measure the return on investment for banner ads through data such as impressions and click-through rates. The company can quickly evaluate if their ads are working well and which ones to reuse for other websites. They can also assess if the websites are effective choices for their products and services. This data from banner ads allows them to track and analyse their marketing efforts in real-time and make swift changes to enhance their marketing campaigns.

How to create effective banner ads

Learning how to create effective banner ads can ensure that the ads capture the attention of the target audience in a very noisy online environment. Here are some tips for creating effective banner ads:

1. Decide on the target audience

A company often has a wide range of products and services that appeal to various target segments. It's important to define the target audience to know where to position the ads. Knowing the target audience helps determine the tone and value proposition in the banner ads.

2. Choose a standard banner ad size

Display publishers typically use standard banner ad sizes on their websites. The horizontal banner ads are called leaderboard ads and the vertical ones are skyscraper ads, and they have standard positioning on different sections of the website. It's important to select the standard banner ad size to effectively work with the design agency and ensure a seamless placement.

3. Create a visually-captivating design

Consumers interact with many banner ads and a visually-captivating design can help to increase the chances of them making a purchase. Marketers ensure that the ads use high-quality photos and present the brand colour and logo clearly adhering to corporate brand guidelines. As there's limited space on banner ads, keeping it simple and attractive with readable fonts is important.

4. Write a winning headline

Intelligent and effective copywriting is essential for a successful banner ad. A winning headline draws attention, engages and is easy to remember. The communication is sharp and clear. Sometimes companies can use witty slogans and humour to capture the attention of their target audience and deliver the message.

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5. Have a call to action

A compelling call to action can prompt customers to do what you intend them to. The banner ad can advertise a promotional event, a massive discount on their website or promotional airline fares for a limited duration. Typically, the most effective call to action is clear and concise.

6. Create animated banner ads

A short multimedia ad can be effective in commanding attention and brand recall. Music and animation appeals to the various senses and very often, people pause to look at these ads. The power of storytelling in a very short duration is essential for creating a memorable banner ad.

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