|In September 2016 - the highest performing SSD banner ads
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
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
for which there is no historic advertising evidence - such as entirely new
product types in emerging segments for which we have strong upside
- we run a pre-purchase free trial of the banner ad to determine if it would be
by Zsolt Kerekes,
StorageSearch.com - originally
published February 2002|
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
Real life banner click rates on
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
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.
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.
- 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
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.
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.
said - what's the problem? Other publications have been running this design
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
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
When they finally understood what I was saying - they
changed the design - and wished that someone had told them earlier.
More about banner ads..................................|
is a problem with the design of the banner ad itself. |
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
How much did we charge this customer for designing a legacy
Nothing. It's all part of the service.
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.
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
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,
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.