Sherpa 101: Online Display Ads - Types, Sizes, Rates & Metrics

Online display ads have been around since the early 1990s, but they’ve 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. That’s 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. Here’s 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, Peterson’s, an educational resource company.

“From my perspective, it’s more of a branding exercise than it is a direct lead generation exercise, because we clearly don’t 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.”

“We’re 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, that’s 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 advertiser’s 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 -- it’s 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 advertiser’s site. The ad’s design and coding determines the number of clicks needed to direct a user to an advertiser’s website or which portion of the ad is hyperlinked.

Here’s 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 advertiser’s 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 publisher’s 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 advertiser’s 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 haven’t 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 IAB’s 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 don’t 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.

Next time: Ad design tips, placement and targeting and how to counter “banner blindness.”

Useful links related to this article

Creative samples of online display ad sizes:
http://www.marketingsherpa.com/cs/oda/study.html

IAB: Ad Revenue Reports:
http://iab.net/resources/ad_revenue.asp

IAB: Ad Unit Guidelines:
http://www.iab.net/standards/adunits.asp

Nielsen//NetRatings: Most Popular Ad Sizes:
http://www.adrelevance.com/intelligence/intel_dataglance.jsp?flash=true&sr=89654

Google AdWords - sample ad sizes and placement:
https://adwords.google.com/select/imagesamples.html
https://adwords.google.com/select/leaderboardplacement.html
https://adwords.google.com/select/videosamples.html
https://adwords.google.com/select/inlineplacement.html

WebsiteTips.com - 7 Secrets for Increasing Banner Ad Clickthrough Rate:
http://websitetips.com/articles/marketing/banneradsctr/

Aptimus:
http://www.aptimus.com/

Midnight Trader - After-hours & premarket stock market news and quotes:
http://midnighttrader.com/

Peterson’s:
http://www.petersons.com/