Banner Exchange Basics - Basic Principles of Ad Swapping Programs

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What is a Banner Ad?

A "banner ad" gets it's name from one of the first graphical advertisements found on the internet. It is called a banner because the dimensions of the ad were made a standard 468x60 which is an elongated rectangular ad that looks just like a banner.

Since then, advertisements have expanded to include elongated vertical ads known as "tower ads" and simple large square button ads. While some sites create rectangular small button ads to promote their site. These are rarely (if ever) exchanged in an ad exchange program.

Google and others have pioneered text-based advertisements that show no graphics at all. This AdWords program has been very popular especially because it is the only way you can advertise your site (or products and services) on Google. This article will only deal with graphical ads, but the principles discussed here largely apply to text ads too.

What is a Banner Exchange?

A banner exchange is a site where many Web site owners contribute advertising to share among themselves. The owners offer to display other site owners ads on their site in exchange for displaying their own advertisement on another site. This is basically saying: "You scratch my back, I'll scratch yours."

But instead of relying on the Web site owners to be honest and post the ad for you, a banner exchange program can enforce the rule that your ad MUST be displayed on another persons site when you display one on yours. Without a banner exchange program, there would be no way to enforce this rule. Worse still, you wouldn't be able to have any accurate statistics such as how often your ad was displayed or the "conversion rate" meaning how many times people clicked your ad.

Nomenclature

When talking about a banner exchange program, we have to understand the following terms:

Impressions: This is the number of times your banner ad was displayed on someone else's site. Usually, this statistic is summed to include all of the sites your ad was shown on during a given time period. One impression is counted whenever a page is loaded that displays your advertisement.
Exchange Ratio: Defines how many ads you must display on your own Web site, before your ad will be shown on someone else's site. The industry standard is to show ads at a ratio of 2:1 meaning that you must display two ads (two web page requests are made to your site for a page where banner ads are displayed.) Orvado is seeking to revolutionize the industry by offering a 1:1 exchange ratio.
Clickthroughs: This number indicates how many people were interested in your advertisement and clicked on your advertisement to visit your site. This is a good measure of the success of your banner ad. When measured against the total number of impressions, it will give you a good idea of how successful the ad was in attracting visitors.
Clickthrough Rate: This is a percentage value that is computed by dividing the total number of clickthroughs by the total number of impressions. So If you had 2 clickthroughs on 100 impressions, the clickthrough rate would be 2%. This is a good standardized measure of the success of your banner ad.

Please make sure you understand these terms completely if you are interested in running a banner ad campaign. These are the industry standard terms and you should know them well.

Managing Ad Campaigns

Most banner exchange networks provide you with a web-based control panel that allows you to manage all your banner ads and view statistics about your banners. Your Web site should also track statistics through the "web server log". Using a log analyzer, you can generate reports about the visitors to your site.

The control panel is usually a menu-driven area that is password protected so that only valid banner exchange members can access the panel. You can add new banners to your account or you could add banners to a new campaign. Usually, the banner exchange network will need to review the banners that you post to make sure they are decent.

Banners need to be uploaded to the banner exchange network in order to be served to other users. This is done to manage statistics and ensure that each banner is shown in accordance with the banner ratio. It also is done to ensure that somone doesn't swap in a new (unchecked) banner for one that has already been accepted.

Another thing that needs to happen is that you need to submit your own Web site which will be hosting the banner. Usually, before you can activate a banner exchange, you will be asked to place some HTML code on your web site which will display banners from the network. The exchange network will review your site and the web page and make sure that it is acceptible.

Lastly, the control panel will show you statistics on how many banner advertisements where "served" (shown) on your Web site and also the statistics for "impressions", "clickthroughs", and "clickthrough rate" (CTR.)

That's all there is to it! Once you get a little practice into using a banner exchange network, it's really quite easy. This is especially true if you are comfortable with HTML and updating your Web site. The hardest part will probably be thinking of a good banner ad to create.

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