Google AdWords: Beyond Text-Based Search Ads - Display Ads vs Pay Per Click and Roles

Banner ads deliver extremely low click through and conversion rates. According to various sources, banner ads get click through rates between 0.02 and 0.5 percent. As a result, all image ads are sold on the basis of impressions. Advertisers pay per each 1000 impressions (meaning the ad is shown 1000 times on the website).

What's the use if no one clicks? Well, banner ads are used largely for branding. Through repetition, marketers get customers accustomed to a particular brand name. As a result, people trust the brand more than a company they've never heard of.

Successful branding though the AdWords/DoubleClick banner network requires careful website and behavioral research. Ideally, you want to reach customers and show them your banners on as many websites as possible; therefore, you have to guess/predict where your customer will go and then buy banners on those sites.

DoubleClick has its own set of tools to help you plan, and Google offers Google Insights and Google Ad Planner for this purpose.

You can buy banners on Google AdWords and DoubleClick networks right from the AdWords interface. Setup is as easy as text ads, but the requirements are little more strict, since you have to adhere to banner size.

You can choose between eight banner sizes: Banner, 468 x 60; Leaderboard, 728 x 90; Square, 250 x 250; Small Square, 200 x 200; Large Rectangle, 336 x 280; Inline Rectangle, 300 x 250; Skyscraper, 120 x 600; and Wide Skyscraper, 160 x 600. Each banner size performs differently. Some get more clicks than the others, while others are simply not allowed on certain websites.

When choosing banner size:

• Keep in mind that publishers get to choose banner sizes. If Newspaper X does not allow a banner in the square 250 X 250 size, then the banner ad won't show on their site. If you want the broadest brand exposure, then don't discriminate on banner size. Make many versions of the same banner in order to reach as many people as you can.

• Maintain the feel, and make sure your brand is easy to recognize no matter the size. Keep design elements intact, exact colors, fonts and backgrounds. Play with positions and sizes, but make sure that the 120 x 600 Skyscraper looks just like the 200 x 200 Small Square.

• Try all banner sizes. Some sizes get more clicks than the others; still, remember that you're looking for exposure, not clicks. Try all sizes to see if you get more indirect traffic/customers over time.

Banner bids work in a manner similar to text ads. The highest bidder gets the best spots. I am not sure how Google determines the best spot to show an image ad. My guess would be that it involves proximity of the ad to content, click through rate, above the fold factor, etc.

Good luck with your AdWords campaigns! Make sure to check Google's AdWords Help Section.