3 Kinds Of Web Banner Advertising Contracts

When buying a web banner ad there are a few different ways that your advertising contracts can be set up; fixed rates, CPM, or PPC. Each has their own pros and cons which we will outline so that you can select the contract type that best suits your needs.

Fixed Rates

One of the more common contracts that you'll run into are fixed rate contracts where you pay X dollars for X amount of time to advertise. The website you’re advertising with is not responsible for the results of the campaign. If you’re getting lots of traffic for a low price that’s great. But on the opposite end of the spectrum you can easily feel cheated if you’re paying a flat rate and getting nothing in return.
Fixed rates allow you to build relationships with your advertisers because these tend to be long term contracts. The benefits of partnering for long periods of time are better pricing, better placement, and much more. The down side to a long term contract is that you’re locked in and if your ad isn't effective you could be looking at paying a lot to cancel your contract early.

CPM

CPM is an acronym for cost per thousand impressions. An impression is any instance in which your banner is displayed because the page has been visited. So for every 1,000 people that see your banner, you would pay X dollars. The benefits of CPM are that you’re only paying for traffic that is seeing your banner. The downside is that you could have a website that gets a ton of traffic but never generates clicks or leads. That’s why it's so important to target websites that are directly related to your niche. Otherwise you could end up paying a lot, and have nothing to show for it.

PPC

PPC stands for pay per click. It’s self explanatory you only pay when someone clicks on your ad. These are less common when it comes to banner ads but if you can find a website that has solid traffic, is related to your industry, and has this type of advertising seriously consider it. The pros are you only pay for people that click on your banner. The cons are that it's hard to find a website that does PPC in it's prime advertising real estate.