Banner Advertising Rates: What You Should Know

In the beginning of online advertising, there were banner ads. And now, decades later, banner advertisements can still be found at the top of many landing pages. In fact, some people link the rise of the internet as a money-making venture to banner advertising. This is because banner ad companies were some of the first websites that made big money. In the late 1990s, banner advertisements could cost as much as $30 to $100 per one thousand impressions, a number that would simply floor anyone shopping around for online advertising space today.  

Eventually, banner advertising was put to the test and researchers and business owners alike discovered that the number of people who clicked on ads and actually converted into customers weren’t as high as the cost for the ad might justify. Now, there are so many websites on the internet competing for ad space, and charging for ad space, new types of pricing structure has emerged. Many people who run their own website choose to manage the advertising on their site on their own, while other people choose to sign up with a banner advertising company which places ads and pays out accordingly. Today, with a little shopping around, businesses can find banner advertising rates as low as $.50 per one thousand impressions. However, they might not have much control over where their advertisement is displayed and if their target market is being reached.

Here are the different pricing models for banner advertising, as well as what you should know about each before sinking money into the advertising model.

CPM (Cost per Thousands)

The CPM pricing model determines the cost of advertising based on how many impressions the ad will get, or how many people will see it (in thousands). Prices will vary between $.50 per thousand views up to $20 per thousand views depending on the “quality” of the views which are determined by the target demographic and the amount of people who click on the advertisement and make a purchase.

CPC (Cost per Click)

Cost per click is based on performance, therefore, the more an advertisement is clicked on, the more the ad run will cost. Most CPC deals include a cap so that the ad is pulled once it costs the advertiser a certain amount of money which they can afford. This is a popular option, and is often referred to as Pay Per Click (PCC). CPC ads are featured at the top of the results page for many of the main search engines.

CPA (Cost per Action)

Cost per action advertisements only charges the advertiser if the ad is clicked on and the person who did the “clicking” purchases something. Books that are advertised on the side of blogs are often CPA advertisements. The online actions of the person who chooses to click the advertisements are tracked for a certain amount of days so that the company which displayed the advertisements will know if the customer made a purchase.

While these are the main categories of banner advertisement rates, there are hybrid versions and more. People looking to purchase advertising space, or offer the space, should take the time to choose the model which makes the most sense for their business mission.

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