While pay per click (PPC) search engine advertising and banner advertising are both effective methods of online marketing, there is a growing school of thought that pay per click ads are in fact more effective and efficient than traditional banner ads. A prime reason for this is that the average internet user has learnt to ignore banner ads as he/she find it annoying. Consequently, banner click-through rates have dropped, leading to poor return on investment (ROI) and a drop in the popularity of banner ads. Another disadvantage is that it is the bigger banner ads that catch most attention and not every advertiser can afford bigger banner ads. Besides, banner ads create clutter and affect website efficiency, discouraging some visitors.
Pay per click search engine ads, on the other hand, appear only when a user searches the desired keyword. This means that you can have your ad appear only when someone searches the appropriate keyword or keyword phrase, making for more targeted advertising and better ROI. Furthermore, pay per click is more cost efficient as you only pay for the number of visitors you receive at your website as a result of the ad. This is not the case in banner ads where you pay a fixed amount per thousand views (also called cost per thousand impressions or CPM), irrespective of whether you get any clicks from the banner to your website.
Summing up, one can say that while banner ads are more effective for brand awareness and driving traffic, pay per click search engine ads will generate better leads and drive sales.