Targeted Banners: A study in permutations

"How are our banners performing?"

It's a question I'm being asked increasingly frequently, as we step up our on-site marketing. And banners are banners: they've been around for years; customers are accustomed to them (and possibly tired of them) and the challenge is to make them fresh, useful, relevant and just plain interesting. However, banners are easy, straightforward and simple to execute, measure and analyse.  You didn't think I was going to recommend adding banners without commenting on KPIs for them?

"Which banners are doing the best?"

So the challenge becomes: how do we make sure we have the right banner for the right customers?  How do we drive clicks and - more importantly - increase revenue?

Some form of targeting helps, and this could be keyword, or geo targeting, or behavioural targeting.  But why not try promoting multiple products instead of just one (or just one family of products)?  If you can split a banner slot into two, you can promote twice as many products in the same space.  And, if you can use some form of targeting, then the options for what to show increase significantly. 

Let's take an online toy retailer as an example.  What would you promote on your home page if you were an online toy shop?

There are several categories you might want to feature:

Construction toys

Dolls

Dinosaurs 

Cars

Robots

Board games 

Outdoor toys 

However, your website design only allows space (or 'real estate') for three.  And besides, you've found that having more than three diluted the effectiveness of them - your visitors get "banner blindness".  So which three do you show?  

You could determine which three to show based on various factors:

What does the customer search for?  If they search for "Lego" or "Jurassic Park", then they'll probably appreciate the banners for construction toys and dinosaurs.  Setting up some form of tracking on search usage across the site, and then matching this to the banner categories will enable you to show content that's more likely to be appealing to your visitors.

Better still, what was the inbound keyword that your user searched for?  I know Google doesn't share natural search terms (for some strange reason, the tracking only applies to Google paid search terms), but if you can access the search term that the visitor used when she came to your site, then you can start targeting her from the moment she arrives on your site, and that's a key advantage.

Alternatively, which marketing campaign did she click when she came to your site?  Was it an email that advertised your range of sports toys?

Or which pages has this visitor been viewing? If they're browsing your pages on Barbie, Sindy and similar, then this gives you a better indication of her purchase intent.

What has this customer purchased before? This will take longer for your targeting to initialise as you'll have to wait for your customer's first purchase, and once it's running it will be less dynamic than the other methods, but will be more specific as you'll know that this user has made a purchase in this category before.  The segment will be smaller, but have a higher likelihood to purchase.  Thinking outside the toy store example to other industries, maybe you could target your banners based on items added to basket (cart); videos viewed on site (what were they promoting); PDF downloads and other success events on your site.

So, you can see, there are various options for how you target, and you can then determine how effective each method is, through testing.  The model doesn't have to be perfect, it just has to be testable, and you can be confident that your testing model will go some way towards making your site more relevant (and better converting) for your visitors.  After all, there are so many variations, surely there's a good chance that you'll find a better set of banners than the one you show to all your generic customers.

So, how many permutations are there?

In our example, there are three slots available on the site, and we have seven different banners we can show.  Here are some example images, taken from various online sites.  In practice, these would be more uniform in design and messaging.

We have three slots in total:

The first slot could be filled by one of seven images.

The second slot can be filled by one of the remaining six images.

The third slot can be filled by one of the five images that we haven't used yet.

7 * 6 * 5 = 210 permutations (we use permutations here, because we can't use the same banner in two slots - that would give us combinations, and would be an even larger number).

If we decided we wanted to use only six of the banners - for example if we decide that board games aren't relevant any more - then the calculation would be:

6 (for the first slot) * 5 (for the second slot) * 4 (for the third slot) = 120

Conversely, if we introduced soft toys as an extra variation, so that we had a bank of eight banners altogether, then we'd have:

8 * 7 * 6 = 336

This is an example of "permutations without repetition" - the sequence of the banners is important, and we only show each banner once (we don't repeat them).  I recommend this site for more on the calculations of the number of permutations.  The short answer is that the more slots you have, and more banners you have, the more permutations there are (significantly increasing with scale), and the greater the likelihood of showing the best banners to your users.

So, target your banners - you'll be able to dynamically target your content to your users, and start to reduce the guesswork from your marketing.  Even the smallest increases in possible locations or banners will rapidly improve your chances of presenting the ideal banner (if not the ideal permutation) to your users.