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.

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!

Banner Ads Are Very 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.