Tips for buying Web banners.

A year and a half ago, list broker Roy Schwedelson moved into a new direct response medium--Web banners. Schwedelson's clients wanted more places to advertise their own sites; many high-traffic sites were eager for a little advertising revenue. "At the time, banner advertising looked just like

Many early banner placements were informal, barter-based deals, Schwedelson points out, but lately his clients have become increasingly sophisticated about the economics of their banner campaigns. Schwedelson says there are several basic principles for building a banner campaign:

Web audiences have distinct personalities: Like mailing lists, Schwedelson points out, Web sites tend to have very specific, measurable demographics that can be used to build targeted campaigns. (For instance, WebConnect recently put together a group of sites with high "Generation X" traffic, he says.) One good way to find sites with the right audience profile is to run a keyword search: "If their keywords match yours, they're probably attracting exactly the kind of people you want."

Cost-per-impression is the emerging pricing standard: Although early Web advertisers tried several ways to negotiate banner placement pricing, Schwedelson says most advertisers now pay for raw impressions "at an average cost of about $20 per thousand impressions." High-visibility sites like Yahoo and Alta Vista often command premium rates, he adds. "But if you do your research you can get the same number of impressions from a hundred smaller sites at $15--and they may be better targeted impressions."

Clickthrough rates are the key metric: "Impressions are a reasonable way to measure the kind of visibility you'd get from a billboard on the highway," Schwedelson says. "But if you're selling direct, you want your prospects to actually click over to your site." He says a banner ad that's performing well will typically generate a 4% clickthrough rate. And when a banner generates a 4% clickthough rate, it will produce leads at "roughly the same cost" ($50/M) as sending out direct mail to the same number of names, he adds.

Brand-name advertisers get the best deals: "A banner ad from a well-known company can add real credibility to a smaller site," Schwedelson notes. To get that credibility, sites will often give premium advertisers a low rate or better positions on the page. "That's very different from a list rental, where the connection between the companies is almost entirely anonymous."

Roy Schwedelson, president, Worldata, 3000 N. Military Trail, Boca Raton, Fla. 33431-6375; 561/393-8200. E-mail: roy@worldata.com.