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Marketing Views

from the makers of StorageSearch.com
... storage search

In September 2016 - the highest performing SSD banner ads running on StorageSearch.com was getting 7.8% click rate.

Most SSD ads in 2016 across a wide range of subjects:- industrial, military and enterprise were typically in the range from 1.5% to 4.8%..

If they drop below that lower level we suggest changes to the design and to the advertising message and also re-analyze the contextual placement of the ads within the thousands of SSD articles on our site.

Another success factor is that we don't accept orders for ads which (with the benefit of 20 years experience doing this) we have doubts about re the compatible aspirations and interests of our readers and the advertising inquirer .

In assessing new advertising prospects for which there is no historic advertising evidence - such as entirely new product types in emerging segments for which we have strong upside research evidence - we run a pre-purchase free trial of the banner ad to determine if it would be sustainably viable.

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

by Zsolt Kerekes, editor StorageSearch.com - originally published February 2002

see also:- branding strategies in the SSD market
"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 asked just before writing this article... My answer is not a number, or percentage. "It depends on your market and your products."

ACSL has been a dotcom publisher since 1996, 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 has typically been 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.


...Later:- if you really want to see something which goes a lot deeper into banner ad effectiveness - take a look at the PhD thesis of Dr. Michelle Anne Toon - A Study Of On-Line Use and Perceived Effectiveness of Compliance-Gaining in Health-Related Banner Advertisements for Senior Citizens (pdf) - which includes a quote from my article.

As I was being dozy - it took me 8 years to discover that paper - which is dated December 2002. Hopefully you'll do a better job looking at who links to your own sites.


...Later:- In 2012 I declined to start a significant banner ad for a big enterprise SSD customer - because I couldn't get them to understand that some of the statements made in their ad design were untrue and therefore undermined the entire credibility of what they were doing.

They said - what's the problem? Other publications have been running this design already.

The problem - I said - is that the other publications don't understand the market and they don't understand your business or they don't care or they have stupid readers who wouldn't notice.

We do understand the market and we do care and we never run ads which insult the intelligence of our readers.

It took about 4 months to get my message across - and show I was serious. During that time we didn't accept any orders for ads from this customer.

When they finally understood what I was saying - they changed the design - and wished that someone had told them earlier.

MarketingViews.com FAQs for connected IT marketers

Zsolt Kerekes - Publisher
Zsolt Kerekes, is the editor of StorageSearch.com
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Later... More about banner ads..................................
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.


...Later:- in January 2009 - I had an advertiser who was happy with the click rate for their new banner. But I suspected that they could do much better - because of the high interest in that subject in our editorial.

I suggested some simple changes which reduced the complexity of their banner, retained the text of their core message, and increased the click rate to 6x the level before.

Nice to know I still have the knack of understanding micro communications.

That's the best way to think about banner ads... micro editorial with guaranteed delivery. So it's worth paying more attention to how readers perceive them. Leaving this important task in the hands of graphics designers is lunacy. Yes - they should do the implementation - but the direction has to be given from the highest level marketer in your company. Because what you learn from testing banner ads - often results in you having to change the way you talk about your company in other places... your web site, your PR.

The success you can get from reapplying what you learn from testing banner ads back into all your corporate communications means that its value is orders of magnitude more than you think.
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