Banner Ads or Pay Per Click Advertising?

Banner ads or Pay Per Click advertising? Are you trying to decide which medium to advertise your business on?

I thought of writing this post after some time trying to explain to a friend of mine over Yahoo Messenger how one is different from the other and I realize a lot of people are undecided when it comes choosing which online advertising medium to use.

So if you were to advertise a product or service, what would you choose… banner advertising or pay per click?

For those who are new to this, let me give you a quick description of each.

Banner advertising is simply the process of purchasing banner space on other websites for you to display a banner about the product or service you wish to advertise.

When choosing the right website to advertise on, you have to take into consideration the website’s traffic (how high or low, and their demographic), how many page views or impressions your banner could get, if the website is using an ad-serving software that allows you to control delivery options, and of course cost which can either be in CPM (cost per thousand impressions), monthly fee or CPA (cost per action).

You can either do the research yourself, by identifying the right websites to make banner ad placements on, or you can advertise through an ad network which have a network of websites who will publish your banner ad on their sites.

Pay Per Click advertising on the other hand is the process of advertising on search engines such as Google. All major search engines have an advertising feature that allows you to advertise on them, but I will talk about Google AdWords since the latter enjoys 65% market share, a commanding lead over Yahoo, MSN and other smaller and regional search engines.

Google AdWords gives you two advertising options, advertising on their Search Network or the Content Network.

If you advertise on Google AdWords’ Search Network, your ad which is in text format, appears only when a keyword you are bidding on, gets searched. Keyword searches trigger your ads. These text ads are typically found in the upper box and the right side box that surround the regular search results. You only get billed by Google if someone clicks your ad, hence pay per click, and you only pay the amount your are bidding, or less, never more.

If you advertise on the Google AdWords Content Network, you can choose to place text, image, or media type ads on websites that belong to Google’s AdSense program, this is a network of websites that publish ads served by Google’s Content Network.

Google AdWords has since inception, added more targeting and payment options to include CPM and CPA, other than pay per click.

What is similar for both banner ads and pay per click ads is that, when the view clicks the ad, the viewer/clicker is taken to your website, or a page on your website specially created to get the visitor to perform a conversion; this is commonly known as the landing page.

What is significantly different for both, aside from the manner of distribution is that banner ads appear to the viewers of the page where the banner ad is found. PPC ads however only appear when a search engine user types in specific keywords, thus presenting itself only when there is a demand. This often yields to higher conversion rates because your service or product is put in front of a search engine user who already has a demand for that type of service of product.

One might be quick to conclude that PPC advertising would then be more effective than banner ads, but banner ads can actually serve a different purpose.

To answer the question about which medium to go with, I would say go with both.

Banner ads tend to work more effectively with high volume websites simply because the impressions are served to all website traffic which are not necessarily as targeted as a pay per click ad served to someone who is in the research phase of a buying process.

Thus, banner advertising can actually help a campaign if its goals are more branding and recall in nature and may not require direct response as a conversion goal, but will still deliver conversions but not as high a percentage compared to conversion rates delivered by pay per click ads.

At the end of the day, any business owner, marketer or advertising specialist is after one thing, return of investment, and the medium that delivers that ROI, after proper campaign planning and optimization, would have to be the best medium to use in advertising your business, regardless of what others may say.

If you have any questions about banner ads, pay per click or other forms of online advertising, feel free to leave your question in the comment section below.

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