In the beginning, “advertising” on the Internet meant “banner ads” — the 728×90-pixel ads you see at the top of almost all Web pages today (including this one). In 1998 or so, banner advertising was a lucrative business. Popular sites like Yahoo could charge $30, $50, even $100 per thousand impressions to run banner ads on their pages. These advertising rates provided fuel for much of the venture capital boom on the Web. The idea was that sites could start up and increase their page impressions to make easy money from banner ads. If a site could generate 100 million page impressions per month, it could make $3 million per month with banner ad rates at $30 per thousand impressions.

Where did numbers like $30 or $50 per thousand impressions come from? That’s what magazines typically charge for full-page color ads. The Internet took the same payment model and applied it to banner ads.

At some point, advertisers came to the conclusion that banner ads were not as effective as full-page magazine ads or 30-second TV commercials. At the same time, there was an incredible glut of advertising space — thousands of sites had a million or more page impressions available per month, and companies like DoubleClick began collecting these sites into massive pools of banner-ad inventory. The economic principle of “supply and demand” works the same way on the Web as it does everywhere else, so the rates paid for banner advertising began to plummet.

Let’s look more closely at what determines banner ad rates.

Banner ads are horizontal or vertical rectangles which contain graphics and text. When clicked upon, a website will display the particular page represented by the banner ads,in other words, the banner advert is linked to the advertiser’s site.
Targeted, well-executed banner advertising is considered one of the most effective online marketing platforms available. Its immense scope makes it a powerful means of promoting your product, and a successful campaign will boost return on investment while enhancing the online visibility of your brand.
Properly placing banners, designing them and choosing a product based on customer type, and following demographic rules will increase banner click through rates and increase sales. In addition, banners on sites that randomly advertise multiple websites should not be expected to perform well. For best effectiveness with banners use them in your pay per click (PPC) advertising.
One of major objectives of banner advertising expands reach of your marketing strategy beyond the specific niche of your product. You get your banner displayed not only on the web pages that are related to your product categories but also on other web pages, which may not related directly to the same field.
Banners advertising services are determined with help of click through rates. Its success depends on various aspects, such as, page views, cost per sales and conversion rates. However, advertising needs to be bit tricky to successfully implement techniques of internet marketing but none can defy the success quotient of this service, if done effectively.