There is a simple formula I use when determining how much money a startup should spend on display advertising in its first year. First, I take whatever budget they had arrived at through careful modeling of estimated traffic, revenue goals and sundry and then I proceed to multiply it by zero. The result is the new budget.

Unless you’re selling Yachts or luxury vacations, a few extra dollars in design, PR, SEO, content development or even (rarely) Adwords will go significantly further than trying to generate positive returns off of banners. Even if you happen to be selling Yachts or luxury vacations, you’d probably have just about as much luck handing out flyers at your next mixer.

Save the banners for when you have exhausted every other channel and still have a few dollars burning in your pockets, at that point the awareness generated might be worth the negative financial returns. (Photo Credit)

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