storage article - Recovering Data from Drowned / Flooded Hard Drives
RAM SSDs versus Flash SSDs - which is Best?
Leading experts discuss the state of the market.
Also includes memory price projections till 2012.
Marketing Views header

What's a Good Click Rate for a Banner Ad?

by Zsolt Kerekes, editor STORAGEsearch

See also:- article:- The harder-working eshot
article:- The Mysteries and Future of Websites
article:- Banner Ad Blindness: Old and New Findings
article:- PR Strategies: Remember, the web has no memory!
article:- Hush Hush Services for STORAGEsearch.com Advertisers
article:- Increasing Your Brand's Visibility by Search-engine Marketing
Press Release FAQ's, Effective High-Tech Marketing Agencies, Storage news
Zsolt Kerekes - Publisher
Zsolt Kerekes, is the editor of STORAGEsearch.com
"What's a Good Click Rate for a Banner Ad?"

As a publisher I'm often asked that question by my advertisers. "Is 3% good?" I was recently asked... My answer is not a number, or percentage. "It depends on your market and your products."

This is ACSL's 12th year as a dotcom publisher, and in that time we've run countless millions of banner ad impressions. So we have plenty of data. Let me take you through the math.

Real life banner click rates on STORAGEsearch and SPARC Product Directory typically occur in the range 0.5% to 7%. The average (all clicks divided by all impressions) is over 1.5%. Incidentally, we've seen click rates rising during the last few years, as advertisers get more responsive to the feedback we supply, and design ads with better targeted messages which take into account the already segmented nature of our readerships.

Cost per click. On our sites, an advertiser buying for example 100,000 impression price point, pays 2 cents an impression. If we assume a 1% click rate, then the cost of a click to your web site is $2. If we assume that just one in a hundred of those visitors (1% of the 1% visitors) are convertible into customers, that's a customer acquisition cost of $200. (That's not the whole story, because there's a branding benefit and we see that running banner ads increases the effectiveness of classified web ads on the same sites.) But let's just work with this $200 cost.

Is it worth it? For many of the products advertised on our sites such as rackmount solid state disks, RAID systems, rackmount Sun servers, military systems etc, a typical entry level system price ranges from $10,000 to about $100,000. So it's easy to see that this is a sustainable process. And actually, most customers are in the market for multiple systems.

But how does this work out for lower cost products? - such as cables or adapter cards, where the average price of the product can be in the range $10 to $500? Surely, you think, our advertisers must go broke, if their customer acquisition costs are so high. Well, I can reassure you that they don't. And there are 2 reasons why.
  • most of the advertisers for the lower priced products run targeted banner ads, so their typical click rates are in the region of 3% to 4%. Let's say a typical customer acquistion cost of about $50.
  • this is the important part! The economics of banner advertising (as with all direct marketing) are based on the lifetime value of the customer. Advertisers of these lower cost products have often commented that an individual sale of SCSI cables, adapters, GBICs or whatever to a new customer who may be a reseller or systems integrator can be over $20,000. And most end user organisations are in the market for mutiple products, either in one order, or over time.
As a publisher, I try to understand the economics of potential new customers, and I often decline advertising orders, if the product profile is that the customer just buys one off a low value product, with little or no repeat potential. I would waste my time by accepting new customers with that kind of business, because it won't be sustainable.

So going back to the original question..."What's a Good Click Rate for a Banner Ad?" the answer is - it depends on your product, your market, your customers, and just as important, the characteristics of the publication you advertise in. It's worth paying $2 a click for the right customers.

...Later:- Many advertisers say that the leads they get from our sites are higher quality than those from Google or other publications. They look at more pages and are more likely to generate a request for quote.

Maybe that's why in the summer of 2007 - all our projected banner capacity for the following 6 months had already been sold to existing advertisers.

MarketingViews.com FAQs for connected IT marketers

Later.....................................
Sometimes there is a problem with the design of the banner ad itself.

The message is not clear, or maybe the design interferes with the message. Usually testing a couple of design iterations will result in a workhorse solution which can also be run on other sites. Now and then, however, the process just gets stuck in a rut.

In January 2003 we had a new advertiser whose initial banner ad (designed by an agency) didn't work very well. It looked OK to me and to our advertiser, but the click rate (less than 0.1%) sucked. Our readers just didn't get it.

3 agency redesigns later, and the banner still wasn't working.

It wasn't the agency's fault. The banners looked great - but maybe they were trying to say too much.

So I decided to design a banner myself, using the knowledge I had about the advertiser and their positioning. The new design is getting a 1.2% click rate. Not very high, but good enough for this promotion.

This was a situation where, we as a publisher, had to step in and help. It doesn't happen very often, maybe once or twice a year.

I've tracked the performance of over 4,000 banner designs. That experience is always available to help our customers understand what's happening.

How much did we charge this customer for designing a legacy banner?

Nothing. It's all part of the service.

Even later... our customer's design agency took our design of banner and tweaked it. This new version is now performing best of all.


More recently - in Q4 2007 - I helped an advertiser increases its banner click rate from 0.6% to over 1.3% (and 5 months later - in Feb 2008 - it was still getting the higher rate).

Better still - the customer signup and conversion rate at their end went up by a much bigger factor than that doubling of the click rate alone implies. Because the new banner message was much more relevant to their target customers.
.
Marketing Views STORAGEsearch SPARC Product Directory ACSL - the publisher