CPM advertising, also known as banner advertising, can be extremely lucrative, even when using ad networks, which provide the lowest CPM rates. However, if an ad is poorly placed, or if the site is not constructed with a consideration for advertising, you will see that your profits are not what they could be. This article will provide some fundamental steps and rules to provide you with the optimal banner advertising configuration for your online advertising revenues.
The most important concept is that of positioning, in this case, what is referred to as being “above the fold”. The term comes from print media, specifically the newspaper industry, where the fold would be a newspaper bent in half — an ad visible on the top half of a folded newspaper would be considered above the fold. In the world of online advertising, the fold refers to what is visible on the screen on most normal monitor resolutions when the ad first loads — a quick search on the web will give you some statistics on what the normal resolution is for most of the population, but 1024×1256 is a good starting point.
Ads that are above the fold perform the best, so when planning a site or doing wire frames for a site, be sure to make room or IAB-standard spaces for banner ads. Current popular and well-used IAB-standard spaces are 728×90, 300×250, and 160×600. One popular banner configuration that sites use is the “hockey stick,” which consists of a 728×90 at the top of the site, and a 160×600 on either the left or right margin of the site. While it is OK for the 160×600 to go below the fold, the more of the ad that is visible above the fold, the better it is for your revenues.
The goal at the end of this process is to get more clicks on your ads, and to provide attractive ad spaces that advertisers are willing to pay top dollar for. Advertisers measure the response to their online banner ads in terms of clicks on the ads themselves, called yield. Yield is clicks divided by impressions, expressed as a percentage — Example:
100 clicks / 1000 impressions = 10% yield.
More typical yields would be below 1% — anything above 1% for banner ads is considered extremely good. The exception to this are text ads, which tend to have higher clickthrough rates, but also tend to have different models of how the customer is charged (see my other articles on CPM and CPC advertising for examples of this).
Some studies have found that users are more likely to click on links and ad banners that are on the left side of their screen, as most people in Western countries read left to right. The best practice is to experiment with positioning (left vs. right) and integration around content to find out the combination that brings in the most revenue for your site design.