Business

banner ad

What is a banner ad?

A banner ad is a graphic display using a rectangle that extends across the top, bottom, or sides of a website or online media property. The horizontal type of banner ad is called a leaderboard, while the vertical banner is called a skyscraper and is located on the sidebar of a web page. Based on images rather than text, banner ads are a popular form of online advertising.

The purpose of a banner advertisement is to promote the brand and/or attract visitors to the main website to the advertiser’s website.

key takeaways

  • A banner ad is a graphic display using a rectangle that extends across the top, bottom, or sides of a website or online media property.
  • Banner advertising was the first form of Internet-specific advertising, which appeared in 1994.
  • Today, banner ads, and nearly all online advertising, currently use a real-time bidding technique called programmatic bidding, which allows approved companies to bid on ad space during the banner ad load time.

How Banner Ads Work

Internet advertising has gone from an uncertain bet to the primary platform for marketing for most companies. In the U.S., annual revenue from digital advertising continues to grow at double-digit rates, reaching more than $124.6 billion in 2019.

Banner ads, also known as display ads, consist of static or animated images or media and are typically placed in high-visibility areas of high-traffic websites. Banner ads are attractive because they can help build brand awareness, generate leads, and retarget audiences (such as giving visitors the opportunity to sign up for a newsletter or free trial before clicking away).

Banner ads function mostly the same as traditional ads; however, the way advertisers pay hosts can be very different from traditional ad space sales. Pay the host for banner ads in one of three ways: CPM (pays for each site visitor who sees the ad), CPC (pays each site visitor who clicks the ad and visits the advertiser’s site) paid) or cost-per-action (the fee paid for each website visitor who clicks on an ad, visits the advertiser’s website, and completes a task, such as filling out a form or making a purchase).

Traditional banner ads have expanded into other formats such as Facebook Ads and Instagram Sponsored Ads. In 2019, Facebook accounted for about 42% of U.S. online display ad spending. The trend in online advertising is that digital display ad spending (including banners, video, rich media and sponsorships) surpassed search-based advertising in 2016 and continues to grow. As of 2019, 31% of online ad spend was on banner ads.

The first banner ad was deployed on the website of wired.com (then called HotWired) in 1994; the banner read “Have you ever clicked here? You will” and the ad directed users to AT&T’s campaign.

Banner technology

Ad networks are responsible for matching advertisers with websites that want to sell ads. They track available ad space and match it to advertiser needs. The technology that enables ad networks to do this is a central ad server that selects specific advertisements tailored to website visitors based on keywords in their searches and website viewing behavior or based on the overall context of the host website content.

Banner ads, and nearly all online advertising, currently use a real-time bidding technique called programmatic bidding, which allows approved companies to bid on ad space during the banner ad load time.

Trends in content marketing revolve around personalization — the ability to make consumers feel as though you’re talking to them directly. As a result, targeted banner ads are becoming more common.

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