Here's what I know about banner advertising after watching the industry for
over 5 years:

1. Ads will cost you anywhere from 30 to 70 dollars (US) per 1000
"impressions". That is, how many times your ad gets displayed on the web
site. (Note, this does not mean how many times your ad is clicked.)

2. Click rates (how many times an ad is clicked) have been declining year
after year, ever since the first banner ad was invented. Click rates are now
between 1% and .5%.

3. Doing the math, an ad that costs you $50 per thousand impressions will,
optimistically, get you 10 click-throughs (and maybe only five or less).
Therefore, you will be paying $5 for every person you bring to your site
with the ad.

4. Obviously, some ads do better than the 1% click through rate. Factors
that influence click-throughs are: Placement of Ad on page (top, side, or
bottom), effectiveness of Ad, and web site where you are advertising.

5. Do you homework on all sites you want to advertise on. Ask them all to
provide you with page impressions per month (not unique visitors), cost per
1000 impressions (in the industry, this is abbreviated as CPM),
click-through rates (if they have them), location of ad, whether it is run
alternating with other ads, etc. etc. etc.

6. A web site with a targeted audience (such as a trade organization related
to your site) will be a better bet for click-throughs and may get you better
visitors (that is, those more likely to want to buy your product).

Are there better places to advertise than banners?

Well, if you look at the $5 per click-through average cost of a banner ad,
then using a pay-per-click search engine like Goto.com is much more worth
it. For example, I get about 30 click-throughs a month from Goto (for a
variety of expense management keyword combos) and pay them only about $5 a
month for the clicks. That's just about 15 cents per click-through. Even if
you get competitive on Goto and try for the number one spot for keywords,
that cost may only be one or two dollars, which is still lower than five
dollars.

There are also alternative advertising vehicles available at most search
engines. For example, putting a text link to your site directly above the
search listings. These can cost as low as 9 dollars CPM, and "may" have
better click-through rates.

Hope this helps.

---------------------------------------------------------
Chuck Evans
Web Marketing Manager
Captura Software, Inc.
(425) 424-1155
chucke(at)captura.com
http://www.captura.com

-----Original Message-----
From: MacLeod, William [mailto:WMacleod(at)innotrac.com]

Does anyone know where I can find general statistics on the effectiveness of
banner advertisement on search engines?

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