To explore this broad and evolving type of advertising we need to begin by defining some terms:

o Hits -- A fuzzy term meaning the number of times a web server has been "hit" by a request for a web page or a graphic image. Since perhaps 5 out 6 "hits" are for graphic images, the number of "hits" can be grossly misleading. Usually people mean by "hits" the number of times a web page has been seen, but to be precise, the better term is "page views" or "page impressions."
o Page impressions or page views -- Refers to the number of times a web page has been requested by the server.
o Banner views -- Refers to the number of times a banner has been viewed. Almost the same as "page views," but some banner server programs don't count the banner view unless the visitor stays on the page long enough for the banner to be fully downloaded from the banner server.
o CPM -- A metric from the print days of advertising, meaning "Cost Per Thousand," using the Roman numeral "M" to stand for one thousand. A price of Ј15 CPM means, Ј15 for every thousand times a banner is displayed.
o Banner ad -- An ad graphic hyperlinked to the URL of the advertiser. These are usually animated GIF images, though we are seeing an increasing number of MacroMedia Flash banners. The full banner size is 468 x 60 pixels, and most sites limit the file size of the graphic to 12K to 16K. The Internet Advertising Bureau (IAB) specifies eight different "standard" banner sizes. http://www.iab.net/iab_banner_standards/bannersource.html
o Creative -- "Ad-speak" for the actual banner graphic.
o Click -- When a visitor clicks her mouse on a banner ad, she is transferred to the advertiser's site. The number of responses to a banner ad is sometimes refereed to as the number of "clicks."
o Click Through's -- Same as "click," commonly used to count the number of visitors who click on the banner and are transferred to the advertiser's site.
Click Through Rate (CTR) -- The percentage of click through's to banner views. A 1% CTR means that 1% of each 1000 banner views (or 10 visitors) have clicked through.
o Conversion Rate -- The percentage of shoppers in an online store who actually make a purchase. This is typically 1% to 5% in online stores, but can be lower or higher.
o Cookies -- Small files written to your computer when you view a banner ad, visit a web site, or put a product in a shopping cart. This helps the banner server to keep from showing you the same ad, or perhaps show you ads you might be more interested in seeing. Cookies are controversial, but are here to stay; too much of the Web is run by cookies to get rid of them. Cookies also allow an advertiser to track which banner ad a visitor saw that brought him to the advertiser's site, and which banner ads resulted in actual sales.
o Run of Site (ROS) -- Refers to displaying a banner ad throughout a web site or a banner network with no targeting by keyword or site category. Run of site advertising costs substantially less than more targeted advertising.