Sometimes, when it comes to advertising, we feel as talented as Don Draper in Mad Men — one of the best (fictional) advertisers in the game. However, advertising has evolved since the 60s, and that’s partly thanks to how expansive the internet has gotten with commerce.
Banner ads, for example, weren’t around until recently. But for prime ad placement, banner ads are the way to go and have cemented their importance in revenue gain for marketers.
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So what exactly are banner ads and how do they work? We’ve got a simplified version you can use to explain them to anyone.
A banner ad, also known as a display ad, is similar to a digital billboard in that it uses imagery (hence the term “banner”) to attract attention with the goal of driving traffic to the advertiser’s site.
Banner ads are placed in high-traffic locations on web pages, creating brand awareness and generating click-throughs, purchases, and leads. These high-visibility locations include the front, bottom, or the side of a webpage; places where the eyes of browsers usually wander.
A great banner ad grabs the reader’s attention and invites them to learn more about what’s being advertised. They’re bright, welcoming, and don’t have much text, instead using images or multimedia to convey a message.
LinkedIn’s banner ad was found in the sidebar of a webpage I was browsing. It was large enough to catch my eye and inviting enough to make me linger on the ad.
How Banner Ads Work
Let’s say you’re a publishing outlet. You are able to drive a lot of traffic to your content because it’s helpful and valuable, but you have no way to monetize your efforts. However, your site does have a lot of valuable real estate that advertisers could capitalize on.
This makes selling that space an attractive proposition. To do that, you can sign up with a display network. A display network helps to connect you with advertisers by providing a script that you can add to your website. This script will populate display ads automatically without you having to lift a finger. AND you get paid a “commission” for each click on the ad that comes from your website. Monetization… success!
Now let’s look at it from the other side of the coin. Let’s say you’re an advertiser. You want to increase more visibility for your brand, so you want your ads to show up on high-trafficked websites that your target buyers visit. You pay the display network directly (rather than the publishing outlet) for ad placements, and you get to choose the types of websites your banner ads will display on. If effective, you get low costs per click, and this turns into real ROI for your business.
A win/win for the publishing outlet and the advertiser!
Are Banner Ads Effective?
Banner ads fall into the category of digital advertising, one of the most lucrative ways to generate revenue. In fact, in 2019’s first quarter, revenue from digital ads reached a landmark high of over $28.4 billion.
Banner ads are lucrative because of programmatic advertising, a term that describes how advertisers place ads. The software of these programs matches ads with the interests of website browsers.
To illustrate, let’s say LinkedIn’s ad team wanted to use Google AdSense as their display network. Google AdSense would then sell LinkedIn a sidebar space on websites professionals are more likely to visit, such as Investopedia. This ensures more potential for overall revenue earned for LinkedIn.
In order to determine if banner ads will be effective for you, it’s important to understand how cost is broken down with this method of advertising.
Because it’s an auction-style system, the cost of a banner ads campaign will vary according to the display network you choose, the ad’s size, how competitive your vertical is, the popularity and the nature of the website placements you earn, and more. However, according to WordStream, the cost per click for a banner ad on the Google Display Network averages around $0.58.
There are two different pricing models for banner ads:
Cost per mille (CPM) – The price for 1,000 impressions (i.e. it has been “seen” 1,000 times)
Cost per click (CPC) – The price for each ad click
Pricing structures vary between each display network, but they typically use an “auction” style system where you bid for your ad placements. In many cases, you can choose whether you bid based on a CPC or CPM model. The former is better for conversions while the latter is better for brand awareness and visibility.
With this in mind, the better your bid, the easier it will be to meet your advertising goals. In many cases, the display network will help you optimize your budget and timeframe to get the most out of your ads.
Now that you have an idea of average banner ad price tags, you can imagine that ad placement and banner size have a big impact on how often your ads are seen and clicked on. Let’s take a closer look at these two variables below:
Banner Ad Placement
The display network you choose should have transparent information on which sites or publishing outlets your ads will appear on. For example, here’s Google’s page on the topic.
Ideally, you want your ads to be placed in front of your ideal audience (rather than just anyone) so that you get the right traffic, which has a higher potential to convert into genuine leads for your business. With this in mind, you’ll want to be well-versed in the targeting capabilities your display network provides so that you can control this effectively.
While advertisers get a lot of latitude on which sites they appear on, they may not have a lot of control over where they appear on that site. On-page ad placement is in the hands of the publishing outlet. However, they do have a financial incentive to place ads in high-value locations. Remember, they get a “commission” from the display network. With that banner ads perform best when they’re:
Close to the content
Above the fold
On the left-hand side
More within an advertiser’s control is the size and design of the ads they choose to create.
Standard Banner Ads Sizes
One of the major factors on your campaign’s effectiveness is the dimensions you choose for your ad(s). The right size and design can have a major effect on the click-through rate and overall effectiveness of your ad.
It’s crucial to know the necessary sizes for your banner ads — but it’s not your only consideration. In order to make sure your banner ad is effective to target audiences, we have some tricks to keep in mind while you’re designing yours.
Incorporate a CTA.
Add your brand.
Make sure to use keywords.
Choose high-quality visuals.
Keep things simple.
Let’s say you have all the tools for creating your banner ad in place. While the actual execution of the design is up to you, it’s important to incorporate these elements in your ad to make sure it’s effective, and not just something that crowds up a webpage.Read More…..
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Topline: While Amazon’s Twitch dominates the live-streaming landscape, a new report from The Information citing people familiar with company financials says it only translated into a modest $230 million in ad revenue for 2018 and a midyear annual projection of $300 million for 2019.
According to the report, Twitch was hoping to see ad revenues between $500 million-$600 million in 2019, with the service eventually hitting $1 billion.
Partnered streamers on Twitch share revenue from commercials, with the option of running ads at will with the push of a button during streams, but the majority of earnings for top streamers comes from premium subscription revenue that’s shared with Twitch.
The same is reportedly true for Twitch, which is now making more off “commerce” like subscriptions; along with its ad revenue, the company is hoping to hit $1 billion in 2020.
However, given the top streamers generally get the majority cut from subscriptions, Twitch sees a better profit margin on ads, according to The Information.
YouTube, in comparison, is thought to bring in billions off ad revenue alone, and according to Laura Martin, an analyst at Needham & Company, the service as a stand-alone business could be worth up to $300 billion after Google acquired it in 2006 for $1.65 billion.
Part of Twitch’s strategy is expanding beyond its gaming roots, with its variety “Just Chatting” category rising 42% to 651 million in total hours watched in 2019, ranking behind only League of Legends and Fortnite, according to analyst firm StreamElements.
Twitch remains far away the leader in streaming with 73% of the market share, according to StreamElements, but it’s being chipped away by YouTube (21%), Mixer (3%) and Facebook (3%), all of which have signed major streamers away from Twitch.
Key Background: Top gamer Tyler “Ninja” Blevins set off a bidding war late last summer when he signed an exclusive streaming deal with Microsoft’s Twitch competitor, Mixer. Facebook, YouTube and startup Caffeine have since signed exclusive streaming deals with former Twitch stars. The moves have just slightly ate at Twitch’s substantial lead in the market, but the long-term impact could be substantial. Regardless, YouTube has a distinct advantage over all other streaming platforms.
No matter the content creator, after they’ve finished streaming for hours on end, they’ll generally make 10-20 minute highlight videos to upload to YouTube.
Big Number: $970 million. That’s what Amazon paid for Twitch in 2014.
I’m the reporter for the Games section of Forbes.com. I previously served as a freelance writer for sites like IGN, Polygon, Red Bull eSports, Kill Screen, Playboy and PC Gamer. I also manage a YouTube gaming channel under the name strummerdood. I graduated with a BA in journalism from Rowan University and interned at Philadelphia Magazine. You can follow me on Twitter @mattryanperez.
Two publicly traded ad-tech companies are combining to push deeper into video advertising.
Los Angeles-based Rubicon Project and New York-based Telaria have agreed to an all-stock deal that will leave Telaria stockholders with 47.1% of shares while Rubicon Project’s stockholders will own 52.9%. After news of the merger, which was announced today, Rubicon Project’s stock price rose by more than 7% to $7.75 shortly before markets closed. Telaria’s stock price also increased more than 11% to $8.39.
According to a combined statement from both companies, the merger will create the world’s largest independent sell-side advertising platform. Telaria, which was known as Tremor Video until it rebranded in 2017, brings an expertise in connected television to Rubicon’s programmatic platform. In addition to connected TV, the companies will let publishers continue to buy ads on desktop, audio, mobile and other video platforms across an increased geographic footprint that includes the Americas, Europe and Asia-Pacific regions.
After the deal is finalized, Rubicon Project President and CEO Michael Barrett will become CEO and Telaria CEO Mark Zagorski will become president and chief operating officer.
According to Zagorski, the merger will allow the company to better compete with even larger players and also better position itself for the era of connected television—a sector of the ad-tech space that’s expected to grow in next year. Combined revenue of both companies was $217 million between the end of September 2018 and September 2019, a 32% increase over the same period between 2017 and 2018.
In an interview, Zagorski tells Forbes “the reason why this merger made so much sense is there are so many complements.”
“What was also really apparent though as we were building our businesses out was there was this huge demand for this single, one-stop shop both from a buy side and a sell side,” he says.
The deal, expected to close in the first half of 2020, comes at a time when a number of ad-tech and mar-tech companies are merging or selling with higher frequency. Some companies are selling to becoming tools within larger firms while others are merging to create the scale needed to compete with juggernauts like Google and Facebook.
Apart from the existing competition, ad-tech companies also face heightened regulatory scrutiny and uncertainty as lawmakers at both the state and national levels look into regulating how companies collect and use consumer data for commercial purposes including digital advertising. Next month the California Consumer Privacy Act goes into effect, and several other bills are being considered in Congress.
According to Barrett, the two CEOs met each other years ago soon after entering their respective roles. He said they were inspired by companies like The Trade Desk, another publicly traded ad-tech company that has scaled over the years. Barrett said a combined company of Rubicon Project and Telaria would “complete the pie.” It also allowed Rubicon Project to grow its video business.
According to Telaria’s most recent earnings, connected TV made up 50% of the business in terms of net revenue, while Rubicon’s was much smaller. (Zagorski says the combined company—which will have a new name sometime next year—expects on a pro forma basis to have a connected TV operation in the “mid- to high- teens as a percentage of business.”)
“Although we were doing well in video, we were nowhere in CTV,” Barrett tells Forbes. “Then you look at all the success that Mark and Telaria has had in a hot, strategic area.”
Finding connected TV opportunities is increasingly appealing to marketers looking to diversify their advertising budgets. And while Facebook and Google have been able to win the majority of new digital ad dollars spent on mobile and desktop platforms, programmatic TV advertising is still largely untapped. That’s led major networks, streaming platforms and cable companies to look for ways to collaborate on sharing and scaling data. For example, Viacom, NBC, Fox and Univision have joined a consortium called OpenAP, which lets them pool their data for audience-buying.
I’m a reporter at Forbes covering marketing, advertising, and technology. Previously, I was a tech reporter with Adweek and before that covered politics in Alabama for The Associated Press.
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