While surfing the net we have all come across the ubiquitous banner ads at the top, side or bottom of commercial web sites. These are what are known as online banner advertisements and they maybe free banner exchanges and paid banner advertising. According to a recent report by IAMAI and IMRB the internet banner ad market will grow from Rs 235 crore this year to Rs 350 crore by next year. Some of the leading online advertisement agencies have been setting up their base here. For instance Rediff, India’s largest website posted a revenue of $23.3 million from India last year which is approximately equal to 90 crores and most of its revenue is from display ads. Some of the main highlights of the report are:

• 80% of people using Internet have clicked on an ad in 2007.
• Banking, Financial Services and Insurance, online industry and ITES (Information Technology Enabled Services) with 25%, 25% and 13% respectively were the biggest advertisers in the online banner space during the 2007-08 financial year.
• Loans by banks and financial institutes and jobsites have the highest degree of recall amongst users.
• Online advertisements play an important role as awareness generators; almost 41% of the Internet users have searched for additional information after seeing the ad for a job site.
• Conversions are highest for ads pertaining to holidays and tours, bank loans and laptops and PCs.

Now you would be wondering what is new here, well if you notice one key section of the industry that does not seem to have got on to this bandwagon in a major way is the Small and Medium Enterprises sector. With India’s growing significance in global trade and its businesses gaining a stronger foothold in the world economy, Indian SMEs are upbeat about the country’s economic growth and optimistic about their own business growth.

The SMEs account for almost 90% of industrial units, 40% of value addition in the manufacturing sector and they contribute to 35% of India’s merchandise exports. Most of these firms are managed by technocrats and operate on tight financial budgets and therefore can’t really afford to allot huge spends on advertsing, which is crucial for any business growth. This is where online banner advertising comes in.

Online banner advertising is effective in creating brand awareness and generating business leads. It has the highest reach across the world than any other medium and what makes it eminently suitable for SMEs is the cost factor. The costs incurred in this advertising are much lesser, as this advertising works on effective payment models. These models are based on click through rates, page impressions, lead acquisitions etc. This model ensures that advertisers get maximum responses at minimum costs.

In addition to this, flexible payment and advertising options give the advertisers an extra edge. The costs to be paid by the marketers are based on activities that add to their business. The online banner advertising works through a banner network that comprises of publishers and agencies that enables advertisers to promote their products online.

As globalisation embeds itself all across the world it is imperative for all business models to think global and advertising globally will yield rich dividends and online banner advertising is one of the most effective mediums.