Displaying your logo may be essential for print and related media promotions, but the question of whether to display logos on banner ads deserves a second look.
People react differently to ads on the Web than they do to ads in other media. A logo in a banner usually screams "advertisement" to the audience, and Web pages are already oversaturated with banner ads. Visitors usually don't want to see ads when they come to a Web site. They are expecting to find information or entertainment.
One of the most ineffective banners is one that contains a logo and a company slogan. How does that banner ad benefit your audience? What reason does the viewer have to click on it? None! You've just said in your banner "Look how good I am" rather than "Look what good I can do for you."
Why Branding Banners Are Ineffective
Sometimes a logo in a banner ad can be helpful. For example, a logo is good for "branding" purposes -- that is, getting your company name out in public so that people are more likely to remember your company, product, or service. Some companies, such as the Coca-Cola Co. or Microsoft, purposely create branding banners because their logo or name is already well known.
Such companies have large advertising budgets to feature their names in many places. For the majority of small businesses, then, using a company name and/or a slogan in a banner ad puts the small business in competition with big-budget companies.
That makes branding banners an ineffective way to obtain high click-through rates.
If you're not a big, well-known company, then how do you get people to click on your banner ad and visit your site? Design your banner so that it offers information or the solution to a problem. If you have to include your logo, then make sure that it is not the main focus of the banner.
When Branding Banners Work
Logos in banner ads can yield better results if they are part of a keyword search. For instance, let's say that you have purchased keywords from a portal site such as Yahoo. In that case, anyone who enters your keywords in a search query will come to a Web page that displays your banner.
Because you have already narrowed down your target audience by using keywords, the people who come to your Web page are more likely to be looking for what you provide. A logo and a tag line that says what your company does may make the visitor more likely to click on your banner and go to your site.
That's why my company recommends that businesses not use logos in banner ads. Such banners tend to have the lowest click-through rates, so we recommend using logos in banner ads only for branding purposes.