SodaHead.com seems to be the exception to the conventional wisdom that click through rates for banner ads are low. SodaHead is an online community and according to a Wall Street Journal article a few weeks ago, “SodaHead ads enjoy click and conversion rates of as much as 10 times the industry average.” As I wrote in an earlier post, click through rates for banner ads are typically much less than 1%. The click through rate refers to the number of times a banner ad was clicked. For example, if a banner ad was displayed 100 times and it was clicked on once, the click through rate would be 1%.
There are several ways that you can try to increase the likely click through rate. You can optimize placement by displaying your banner ad on a website with synergy. Alternatively, you can use rich media to make the ad more noticeable and engaging. Personalization is also likely to increase clicks. So how does SodaHead do it? They ask provocative questions and engage viewers by asking for their opinions.
Though SodaHead has a high click through rate, what is their return on investment (ROI)? My question remains. What is the value of a banner ad? As the Wall Street Journal article points out, SodaHead has yet to make money.