When I started out online in 2010 I was told to:
1. Find a profitable niche
2. Set up a blog
3. Place affiliate banners on the sidebar of the blog to earn money
This method is flawed and if you follow it you’re unlikely to make any money at all (read on to find out why).
Despite this I still see marketers teaching this and many more newcomers following it.
I can understand why because it seems like a reasonable plan at first sight. Surely a proportion of your visitors will click on the banners and buy the product that the banner is being linked to?
Well, if you have TONS of traffic, yes, you can make sales in this way.
But let’s look at the math (or maths depending on where you live in the World :-)):
According to Wikipedia, “In most cases, a 2% click-through rate [for a banner ad] would be considered very successful”.
This means that if 100 people visit your site then 2 people will click on your banner and go through to look at the product which is being advertised on its sales page.
Actually, in my experience the average rate is less than that but let’s be generous here and use the 2% that Wikipedia suggests.
Next, let’s assume that the sales page which the banner links to converts at 5%. The online average is probably closer to 1% but again, let’s be generous.
This means that for 100 people clicking on the banner on your site, you’ll make 5 sales.
So in this example you need 1,000 visitors to your site to make a sale:
1,000 visitors > 2% or 20 people click on banner > 5% or 1 person buys the product
So to make 1 sale per day, you need 1,000 visitors to your site! And remember, we’ve been generous here with the numbers!
This is a huge amount of work for very little reward.
The Main Point
The point here is not that you shouldn’t use banners. By all means put them on your site (I do). But rather, don’t have this as your main strategy as I hope you can see from the example above that you need an awful lot of traffic to make any sales at all.
Far move effective way to make sales is to promote the affiliate product not using banners but by using email marketing.
For example, most of my emails average 15% click through rate. So if you have 1,000 people on your list then you can send an email and get 150 (15% of 1,000) to the sales page and make 7 sales (5% of 150).
So, what would you rather:
1) A list of 1,000 so you can send 1 email and make 7 sales
2) Have a blog with a banner on it that requires you to get 1,000 visitors to make 1 sale
Personally, I’d go for the first option every time (and this is exactly what I do).
Whatever way you look at it, email marketing is the place to start. So before you worry about putting banners on your blog make sure you have an optin form on there to get new subscribers.
Also, you should have a separate squeeze page and drive traffic directly to that. From there you can mail your list to promote an affiliate product. You’ll make a LOT more money doing this and whether people purchase or not, they’ll still be on your list for another day when you can repeat the process!
Agree, disagree? Please click Share/Like/Tweet if so and I’d love to hear your thoughts below… 🙂
I think you meant you would go for the “first option” every time (not the banner option) 🙂
Well spotted Fred, now corrected and thank you for spotting it!
Cheers, Rob.
Hey,
that are some nice insights on Banner advertising, I never thought about it like this. I prefer email marketing too, but I think it’s not easy to start with.
Maybe you could do the next article about that 😉
Regards Phil
Hi Phil,
Glad you enjoyed it. Yes, much more to come on email marketing. If you go through the previous posts here you’ll find a lot of strategies relating to that too 🙂
Cheers, Rob.
Hey Rob,
Really enjoy reading your stuff, I think what I appreciate is the simplicity behind everything you talk about, my brain is not rattling trying to digest everything.
Just a note from your post…
“So, what would you rather:
1) A list of 1,000 so you can send 1 email and make 7 sales
2) Have a blog with a banner on it that requires you to get 1,000 visitors to make 1 sale
Personally, I’d go for the second option every time (and this is exactly what I do).”
It’s my assumption you would truly go for option one.
Anyway have a great day and look forward to more.
D
Hi Duane,
Thanks a lot for this. You are quite correct and that was my error there. Now corrected if you check again above!
Cheers,
Rob.
Hi Rob,
I agree that the figures quoted were slightly generous. Banner ads don’t work very well any more.
I do use them on sidebars, but they’re there for eye candy, nothing more.
John.
Well said John, thanks!
Cheers, Rob.
I tested some banner ads on my diet niche site which gets upwards of 20,000 visitors/month. My CTR is <0.1% and my conversion rate is ZERO. I would say 2% is not just generous, it's fantasy.
Hi Howard,
Thank you very much for sharing your numbers – much appreciated.
I think this is very valuable information for anyone who still has doubts on the original post above!
Cheers – Rob.
Hi Rob,
A very interesting post as usual .You have been very generous with the figures and still manage to make a compelling argument. I’m disappointed because I had hoped to make some sales from my banner ads and that doesn’t seem likely now! That’s the way it is though and we have to use the best options available at any time. We have more chance of success when we have a list but for us newbies it’s not going to happen until that list has been built. More work on my list building required then! I’ll look forward to your future email marketing posts. All the best, Laurie.
Hi Laurie,
Great to see you here in 2013 🙂
Yes, it;’s all about starting with that list. I wrote about how I built mine a while back if you look on this blog. Remember, EVERYONE started with zero subscribers and no knowledge of this business. So it’s ALL doable!
Cheers – Rob.
It certainly is Rob and I’m going to do it! How about that for positive thinking?!
Good luck with all of your ventures in 2013.
Cheers, Laurie.
Hey Rob,
In addition to my “Financing Your First Home.com” site, I have several other sites; one of which is a food site in the gluten-free area.
The gluten-free site does 300-500 visitors per day and on peaks maybe 1000 VPD and our click-though rates on our newsletter e-mails, according to aWeber, is usually 15%-ish. So, it matches fairly closely to your figure.
But, I agree with Howard above, we get very few sales from display advertising. Display ad sales is pretty much a fantasy. We had an affiliate sale on a cookbook for less than $10.00 at the beginning of December and “it was such a big event that we almost popped the cork on some champagne :-).” It came from a display ad in a side-column.
Most of our sales come from AdSense or from in-context affiliate links. One of my penny stock sites did get some sales a long time ago from, I suspect, a top of page display ad for an affiliate relationship but that seems to have been very much the exception. Unfortunately, my ad tracking at that point i my career was somewhat less than good so I couldn’t find out where the sales actually came from… my bad :-(.
One big disappointment that I have as a site owner is the poor response we get on CPA ads. I’ve been in internet marketing since around the year 2001 and in all that time, I have NEVER made even 1 sale from CPA advertising. I’d be real interested in your perspective on that. I don’t know whether they are cheating me or whether I do something that doesn’t prequalify my clicks to them properly.
I get some sales from Amazon but it’s so low percentage-wise that we don’t even bother to track it. Most of them are, we suspect, from indirect sales from visitors that clicked on in-context recipe component links. They check out Amazon’s price, get cookied and then buy something else later before the cookie expires.
Our Kindle sales for books I’ve written are nice but not stellar, some months, and review bombs are a serious problem. Unfortunately, it seems like it is almost impossible to get a negative review removed. In one case I had like 3 or 4 5-star reviews and one absolutely devastating 1-star review that didn’t, in my opinion, conform to their guidelines. In fact, I’m in the process of getting all of my books out of KOLL so I can market them elsewhere.
You are one of the marketers in the IM-space that I listen to and I’d be real interested in an article on any or all of the subjects I mentioned.
I liked this article.
Best regards,
Al
Oh, yeah, I forgot… I lump display ads and banner ads into pretty much the same bucket in my mind… And, I use the terms interchangeably.
Al
Hi Al,
That’s quite a list there and thank you VERY much for sharing this, I’m sure lots of people will find it extremely helpful 🙂
I think basically, time is very short for people. If you can’t see immediately what to do on a website then you leave immediately. Also, people are savvy to ads these days and have become “blind” to banners on sites.
Hence emails are so much more effective.
But of course, it all depends upon the traffic. Eye catching banners on high traffic sites do get clicks and people do buy them and get good ROIs. But what we are really talking about is smaller sites with the kind of traffic levels you have mentioned in your comment. In these cases the numbers just don’t really add up!
Very interesting on the CPA. For people who don’t know about this, CPA is Cost Per Acquisition and companies can pay affiliates for driving traffic and performing a specific action on their site such as taking a free trial or filling in an an application form. The traffic in the CPA world is so huge. Perhaps it’s just not suited to your business Al?
Very interesting also on how a bad review an impact your Kindle sales too.
Cheers – Rob.
Well hello Rob, thanks for the maths reality check.
I now understand why its better to have a clean site with just your optin offers rather than various banners taking people away from your business.
Another kick up the bum reminding me to make 2013 the year of the list build!
igor Griffiths
You make a great additional point Igor: A clean site can also increase attention to the things that do work (such as blog posts). Well said!
Cheers, Rob.
Hi Rob
Thanks for the post, and happy new year 🙂
Actually, according to one source, statistics show that people are more likely to survive a plane crash than click on a banner ad. On average. But in reality, CTRs and conversions vary hugely based on so many factors that even statisticians are in trouble.
Yet, a huge amount of marketing professionals keep using this form of advertising – I suspect this is partly because stakeholders want visible ‘evidence’ of marketing and marketers (in companies) succumb to this pressure. However, there are many forms of banner advertising; behavioural marketing and remarketing being the more, well, ‘sophisticated’ forms of it. These actually appear to work better (and cost a lot more) although there is less data for this as it’s only been going for the last couple of years.
Regardless, I believe in these 3Cs a lot more: content, contacts and conversation 😀
Cheers
Kati
Hi Kati,
You’re spot on with saying click through rates on banners vary. Naturally, it depends on the image used, placement, what other distractions are on the page and what kind of traffic arrives at the page too.
Banner advertising does work but again the main point of the post here is to talk about smaller sites that people start from scratch with relatively small amounts of traffic.
Cheers, Rob.
P.S. Like the 3Cs – very good advice there 🙂
Hi Rob,
I have not had much luck with sales through my own site with banners, about 3 in total I think over many many months! So, I would agree those figures cant be far off.
However, with driving traffic – I once had a Google Adsense campaign at $0.01 per click and this was all banner traffic. Then Google changed the rules so it stopped. I have tried with other 2nd tier PPC providers with not as much success. I am still experimenting though. But it is all incoming traffic, not direct sales…..
Best Regards
John
P.S I think finally I have the solution to commenting on your blog. Firefox!
Thanks for sharing your direct experience with this John – always great to hear from you 🙂
Cheers, Rob
Hi Rob
It occurred to me whether a complimentary product banner ad could be used in a way ‘unsure about our product, look xyz company trust us so much they asked us to promote and they are well established?’
Could that twist on a theme be of use to the (me) newbie to help get off the ground. It would not matter if nothing earned from the banner, a bonus at best.
Hi David,
Thanks for your comment, great to see you here.
It’s an interesting idea and one that would need to be tested I think to determine if it’s beneficial. But overall remember the main points here on low click through rates for banners: Unless you have a great deal of traffic on your site banners probably aren’t worth bothering with. At least not until you’ve focused fully on the more profit means of promotion like email marketing.
Cheers,
Rob.
A valuable insight for me. Thank you.
You’re welcome Denzil 🙂
Rob
I concur. Banner advertising enables me to buy a cup of coffee once a month if I’m lucky.
Affiliate marketing may be better but you still need to get your readers to click and buy and you only get a small % of the sale. 5% if you’re lucky.
The only way I see to make money is to sell your own products and offer your buyers an affiliate marketing program to promote it.
Hi Carol,
Thanks for your input, great to see you here 🙂
I disagree only with the slightly on the affiliate marketing side. Whilst creating products is very profitable and something I always recommend, affiliate marketing is very viable on its own and a lot of people make a ton of from it. But it’s the method of promotion that really matters. For example, I’ve made far more money promoting affiliate products via email than I have promoting my own products via banners!
Cheers – Rob.
Hi Rob,
Don’t some of the high traffic blogs use banners as income through advertising? They are not promoting affiliate offer for themselves, but others are paying them to have the banners on their sites due to their high traffic?
Regards,
John
Hi John,
Absolutely, yes they do. As you say they are high traffic and this post really is about sites where the traffic isn’t as high. That’s the critical think I think, if the traffic isn’t high then you won’t get enough click throughs to make and sales.
Kind regards, Rob.
Hello Rob,
I just discovered your blog not too long ago and I have noticed many gems around! It is without a doubt, building an email list is the smarter approach as it is difficult for new sites to get constant traffic initially. An email list will ensure more sales. It will also mean a lot more of returning visitors (provided that the site provides useful contents) which will make banner ads or ppc ads more profitable!
Banner ads might not get a lot of clicks, but if you have your own product, a banner ad around the web will definitely help build your brand.
Thanks Rob for a good post!
Regards,
Tan
Hi Tan,
Welcome along, great to see you here!
Totally agree with your comments and definitely on having banner ads on other high traffic sites pointing back to yours. That IS a good idea. It’s just that having banners on your own site when it doesn’t have that much traffic is almost certainly a route to disappointment!
Cheers, Rob.
Hi Rob,
Hope you’ve had a good start to the New Year.
Whenever I’m evaluating an ‘online’ marketing approach, I tend to ask myself “what is the ‘offline’ equivalent and how do they compare”?
In this instance I’m reminded of those guys on Oxford Street, London holding their little banners saying ‘Golf Sale’ (or whatever).
I’m sure standing on Oxford Street they’ll get a decent amount business as the footfall is soooo huge.
Now take that same guy with the same sign and stick him in a quiet village in the middle of nowhere and see how he gets on.
If you’re the ‘Oxford Street’ of the internet (Amazon, Ebay, Huffington Post etc) then great.
If your site is more akin to the ‘tiny village’ then don’t bother.
Regards
Ian
Happy New Year Ian and yes, all going very well here thank you 🙂
Your analogy is excellent, thank you for sharing!
Cheers! Rob
Great points. I’ve never had success with banners as far as generating comissions goes. I’ve been able to sell a good amount of adspace in the form of banners, though.
Hi Ryan,
Nice to see you here on the blog, welcome along to the discussion 🙂
That’s great, always a nice extra income if you can sell banners! Thanks for sharing your experiences.
Cheers!
Rob
HI Rob,
Another great article… I offer free reports on my health niche websites and convervsion has improved big time. It won’t happen over night, as email marketing can take time to build up (and is a presell in it’s own right.) However, it is the way to go if you want to create sales funnels online.
Keep up the great work mate.
Hey Johnny,
Great to see you here and thanks for saying hello. Glad you enjoyed this 🙂
Cheers! Rob.