IMPORTANT POINTS-

SUMMARY: Abandoned just a few years ago, banner ads are back with a vengeance, although theyre now known as online display ads. Advertising networks and enhanced targeting are drawing marketers back to this lower-cost format. In this first of a two-part primer, learn all about the latest types of online display ads, sizes, rates, metrics and more.
Online display ads have been around since the early 1990s, but theyve made a recent comeback among marketers looking for lower-cost advertising options. In the dot-com heydays, advertisers placed hyperlinked images called banner ads on websites. Commonly found at the top of a page, a banner ad was one of the first online advertising models. It was eventually considered less cost-effective and went into a steep decline. How times have changed. The ads have been chopped up and stretched into various sizes. In fact, the term banner ad now refers to a specific ad dimension (468x60 pixels). Innovations like animation, video and interactive features have made the ads more attractive to Web surfers. Advertising networks have emerged, offering marketers targeted audiences on a variety of sites. These new features and the ads lower costs have, once again, made them attractive to marketers. Display ads accounted for 22% of all US Internet advertising revenue in 2006, a 2% increase over 2005, according to the Interactive Advertising Bureau. Thats still well below the 56% market share these ads held in 1999 -- before search marketing came along. But online display ads offer more options than ever before for marketers thinking of adding them to the mix. Heres what you can expect today: Rates and Impact Online display ads generally are used to build brand. Generating website traffic is not their strength. They typically get a 0.1% to 0.3% clickthrough rate, says Michael Fleischner, Marketing Director, Petersons, an educational resource company. From my perspective, its more of a branding exercise than it is a direct lead generation exercise, because we clearly dont see the same type of clickthrough rates as with, you know, Google AdWords, or other online advertising, Fleischner says. Those response rates have put downward pressure on the price of ads, which are either priced by: o Cost-per-thousand impressions - CPM o Cost-per-click - CPC o Cost-per-action - CPA Whatever the measurement, the price has plummeted, says Fleischner. When I started out in this business [in the mid 90s, publishers] were getting, you know, 35 bucks per thousand. Over time, that went to $10 per thousand, $3 per thousand, and even $1 per thousand. Were seeing ads ranging in the $4 to $7, $4 to $8 dollar range on leading properties ... non-premium inventory can be had for 50 cents to a dollar per thousand impressions, says Michael Sullivan, SVP

Media Services and Marketing, Aptimus. As for cost per click our banner ads are going to run around $1 or $2 per click. For a decent site, thats what you would look to pay, says Brooks McFeely, President, Midnight Trader Inc. Ad Types An array of online display ad types exist -- everything from hyperlinked still images to interactive mini websites. Marketers usually mix and match types of ads, making almost everyone a hybrid. Here are the typical types: -> Static Static display ads, which have been around for more than a decade, offer no movement or user interaction. They are simple images hyperlinked to an advertisers site. They can contain a combination of still images and text. -> Animated Animated ads inject movement in .GIF or Flash formats. Depending on the design, the entire ad can be animated or just a part of the ad while the other part remains static -- its up to you. Publishers usually limit the file size of an animated ad and the number of times the animation can loop on their sites. -> Interactive Interactive display ads include a long list of tools and games. They offer the user some function while bringing them to the advertisers site. The ads design and coding determines the number of clicks needed to direct a user to an advertisers website or which portion of the ad is hyperlinked. Heres an example: An imaginary game ad features animated moles popping out of the ground, and a hammer floating through the air. When a user mouses over the ad, the hammer becomes the cursor and text appears encouraging the user to Whack a Mole! As the user whacks the moles, they are taken to the advertisers site after a specified number of whacks (clicks) -- whatever way the ad is set up. Other interactive ads can accept information from users, such as email addresses or ZIP Codes. The ads functions are limited only by the programming and the file size permitted on the publishers site. -> Video ads Video ads play a short video for the user. The video can be programmed to play automatically when a Web page opens, or it can be user-activated. Their functionality varies greatly. Some allow users to rewind, fast-forward and adjust the volume; others offer no controls. One thing almost all these ads do is link to an advertisers site. -> Expanding ads Expanding ads increase in size when moused over or clicked. Their expansion varies. They can start as a static image ad and expand into something as complicated as a fully interactive video. Or they can start as an animation and expand into a list of product features. A significant feature: Expanding ads give marketers the ability to offer more information without forcing the user to visit another website. Even so, they usually offer users the ability to click to a site. ONE CAUTION: We havent found that the dynamic ads produce a significant increase in quality clickthrough traffic, McFeely says. We may get more clicks, but not more leads. Ad Sizes Although ads can be any size allowed by a publisher, there are more than a dozen commonly accepted

sizes. The Interactive Advertising Bureau maintains a list at its site (see hyperlink below) and Google provides examples of the ads and their typical placement (also linked below). Some of the most common sizes, in order of popularity: #1. Leaderboards (728x90 pixels) Leaderboards are the most common Web ads, making up 30% of all online display ads, according to Nielsen//NetRatings. They are frequently found at the top or bottom of a website and stretch across a page from end to end. #2. Medium/large rectangles (300x250 pixels and 336x280) These box-like ads are often used to interrupt text content; paragraphs form around them. This gives the ads a stronger chance at being seen since users read around them. #3. Wide skyscraper and skyscraper (160x600 and 120x600) These aptly named tall ads usually run down the left or right side of a site. #4. Non-standard dimension Not every ad conforms to the IABs guidelines. Display ads in this category can be any non-standard dimension agreed on by the publisher and the advertiser. As the fourth-most popular category, these ads illustrate that not every ad needs to conform to standards. #5. Full banner (468x60) Full banners look like smaller leaderboards. #6. Button #1/Button #2 (120x90 and 120x60) Buttons are small, box-like ads that usually dont offer functionality beyond a link to a site. They can feature animation. Ad Metrics Measuring the effectiveness of displays ads has come a long way in a short time. Maybe five years ago, you could tell maybe how many people clicked on your banner. Today, you can tell not only how many people clicked through, but where they were, what page they were on when it was displayed, and [you can] follow that individual all the way through purchase, says Fleischner. Ad tracking can be done: - In-house with resident programmers - Outsourced to a service provider - Part of a package provided by an ad network Many service providers offer metrics for ads in real time. This enables you to quickly adjust or stop a campaign that is underperforming. Standard metrics used to monitor display ads include: o Impressions served o Domains served o Clicks o Clickthrough rate o Conversions o Cost-per-thousand impressions o Cost per click o Cost per conversion o Return on investment

Selecting which metrics are most important to your campaign depends on your objective. If you are trying to maximize sales leads, then cost per lead is more important than impressions served. If you are brand building, impressions served is more important than cost per lead.

Rich Media Rich media is a generic term for a variety of highly interactive, visually influential internet advertising formats. With vector-based graphics, streaming audio and video, and Java powered interactivity, rich media ads deliver enhanced impact and result in improved user response. Most rich media ads are displayed in a voluntary exposure mode so that they are generally acceptable for most internet users. The premise of rich media ads lies in the assumptions that messages appealing to multiple perceptual systems are better perceived than those that call on single or fewer perceptual systems, and that high quality messages (e.g., vividness or distinctiveness) are more effective than low quality messages (Reeves and Nass 1998). However, the visual impact of rich media ads is often positively related to the amount of information, which in turn, determines the size of an ad. The larger and richer an internet ad, the longer time it takes to download and display on the computer screen. The increasing use of rich media ads is partially attributable to the proliferation of broadband internet in the U.S. households. Rich media ads are found to be more effective than banner ads in professional studies.

Keyword Search Keyword search became the most popular format of internet advertising in 2003 in terms of revenues, surpassing banner ads, classifieds and sponsorships (IAB 2004). Keyword search, also called paid listings, are main sources of revenues for internet search sites such as Yahoo!, MSN, Lycos and Google. Keyword search rises to meet the new needs of consumers, advertisers and search and content sites. As information on the internet increases exponentially, finding useful information on the internet is never an easy task. Search sites become the starting point of internet use for millions of users every day. It is estimated that 30-40 percent searches are out of commercial motivations, making keyword search a potentially lucrative lead to Web sites that are designed to sell. Most paid listings services such as Overture and Googles AdWords offer keyword search on a pay-per-click basis, a pricing method that advertisers prefer. Keyword search is superior over other internet advertising formats in that it delivers Keyword search is superior over other internet advertising formats in that it delivers relevant commercial information at the moment when users need it. As a result, users are less likely to consider it intrusive. Unfortunately, little research is available about the effectiveness of this format of internet advertising at present.

A Shoshkele (pronounced Shosh-KEY-lee) is a proprietary type of floating ad developed by United Virtualities. Named after the company founder's daughter, the Shoshkele has won several industry awards and is sometimes used generically to mean a floating ad. Like other sophisticated versions of the floating ad, a Shoshkele can come in any shape or size and include sound, animation, and interactive components. According to United Virtualities, Shoshkeles display reliably in almost any user's browser without requiring a plug-in or interfering with Web page downloads, and can be implemented in a single line of JavaScript.