Measuring Online
Advertising Effectiveness 

 
 
 
Overview
  • Intro
  • Traditional Advertising
  • Types of Online Advertising
  • Why Measure Advertising Effectiveness
  • What to Measure
  • Where to Measure
  • When to Measure
  • Quantitative Methods of Measuring Advertising Effectiveness 
  • Endnotes & Sources 

This page has been brought to you by JoRi,
students from Prof. Richardson’s MGTD06 class
at the University of Toronto (UTSC)  in the Sept-Dec 2006 term
 
Joanne Abbawi Rimon Matyas
.
 
How this 
unit came 
about...
Since the development of the D06 “Marketing in the Information Age” course Prof. Richardson has been discussing the efficient use of all the E-Commerce tools. These discussions were included within each of the units, however there was not a specific section covering the topic of measuring online advertising effectiveness. During the fall 2006 session of D06 students Joanne Abbawi majoring in finance and Rimon Matyas majoring in marketing approached Prof. Richardson about developing a unit dedicated to measuring the effectiveness of online advertising. The newly formed team named JORI had the goal of combining the team member’s expertise to research and develop a unit that will discuss both the marketing and financial implications of online advertising. This newly formed unit included an intensive discussion of the different ways to advertise online, the evaluation techniques used in choosing the most appropriate advertising method and the methods used in evaluating the effectiveness of the ads. Furthermore the unit compared these marketing concepts to financial concepts such as costs benefit analysis, ROI and budget decisions. JORI worked on this unit from September to December of 2006 and the unit was finally added to Prof. Richardson’s site on January of 2007. 

Unless otherwise quoted, the text in this unit is JORI’s interpretation of their research findings. For additional source information please refer to the Endnotes & Sources section.


 
 
 
Traditional
Advertising
Measuring the effectiveness of traditional advertising has been done in the 1990's and 1980's through different processes.
.
Some people who are experts in this field use numbers related to 
  • audience size - if it is broadcast [TV or Radio] 
  • circulation - if it is advertising in a periodical 
  • number of addresses - if it is postal related, ie. flyers in mailboxes 
  • and other formats 
Traditionally when people buy advertising, they buy it from people who can "deliver"
  • 10,000 addresses of people in a town 
  • 25,000 listeners in a radio program 
  • 40,000 readers of a community newspaper 
The pricing is based on cost per contact - the term most often used was CPM - cost per thousand 

 
 
Types 
of Online 
Advertising
Whenever the word online advertising is mentioned, the first thing that anyone thinks of is banner ads. However, banner ads are not the only form of online advertising by any means. This section will explore the different forms of online advertising and their uses. It is important to note that although there are numerous ways to advertise online, not all of them will suit the needs of all websites. Choosing the right method for your site is dependent on your GOPST analysis, as only a few types will help with your Plans and Strategies. 

 
 
  Some of the more popular means to advertise online are:

1. Pay Per Click/Pay Per Sale: Advertisers often develop deals with search engines or affiliate sites where  they pay a predetermined amount for each click-through that is forwarded to them from the third party’s site. This practice is known as Pay Per Click advertising and it is useful in increasing traffic for the advertiser’s sites. However, this method does not guarantee any increases in sales since the potential customers might just click through and move on. 
Pay Per Sale on the other hand links the advertising costs to future sales. 
 
By using the Pay Per Sale method, the advertisers only pay the third party if the customer actually clicks through and makes a purchase. In this case, a predetermined amount or a percentage of the sale is paid out to the third party. As with the Pay Per Click method, a potential disadvantage is that although the advertiser is only paying for sales made, they are still paying for the cost of the bandwidth that is used by visitors that just click-through and simply move on. 


 
 
 n 2. Search Engine Order:  Just as mentioned in the Search Engine Order (SEO) ranking section, Proactive and Paid submission of the advertiser’s site to the Search engine acts as another 
advertising method. Increasing your SEO ranking not only increases traffic to your site but acts as a means of advertising your brand. Often advertisers not only pay for the SEO submission fees but also for the services of SEO consultants in the hopes of taking advantage of this powerful tool.  (For more details visit the SEO section)

 
 
  3. Banner Advertising: horizontal bars placed at the top of a web page linking to the advertisers site. Banner ads usually have a lot of colour, graphics, animation and some statistics as they are used to promote, persuade and remind customers. Banner ads are by far the most popular means of online advertising, although it has been argued that banner ads are not effective in increasing sales. Opponents of banner advertising often argue that web surfers more often than not ignore banner ads and thus reducing their effectiveness. (For more details visit the Banner Ads section)

 


 
 
  4. Sky-Scraper Advertising: a slang term used to refer to vertical spaces that run on the left or right sides of a page to display ads. Sky-Scrapers are similar in many aspects of their functionality to banner ads with the exception that they remain visible even when the visitor scrolls down the page. For this reason Sky-Scrapers are more expensive for the advertiser than banner ads.
(To see an example of the costs associated with Banner & Sky-Scraper Advertising visit the nickles.com website)

 
 
5. Sponsorships: a newer form of online advertising that allows the advertiser to sponsor a section or content of a page. Regular Sponsorships allow the advertiser to “rent” a section of the page to display their logo, a message or a promotion. Content Sponsorship allows the advertiser to submit the content they would like to display on the page and after evaluation this content is displayed/advertised. This gives the advertiser slightly less control in the message they want to advertise, but on the other hand it might be more effective in ensuring content integration between the page and the advertiser’s message. An example of Content sponsorships would be “This cool Video is sponsored by ABC.com” 

 
 
  6. Pop-ups and Pop-downs: new windows that appear as soon as the user types a website URL or click on a link from the third parties site. Pop-Ups open a new smaller window displaying the advertiser’s message and Pop-downs appear on the bar at the bottom of the screen. Often for the user to be able to close these messages, they would need to click on them making it an annoyance for the user. Today users often have programs that work to block these messages from appearing, thus making them really useless. (Some of the disadvantages associated with using Pop-up ads are highlighted on the AKA Marketing website)

 
 
  7. Interstitial Advertising: similar to Pop-ups Interstitial ads open a new window when the user moves between pages on a site. Although the users can simply close them and move on, research has shown that they have higher click-through rates than banner ads as the visitor is forcefully exposed to them. If done properly interstitial ads can be a good method of exposing the visitor to the advertiser’s promotions while they are on the advertiser’s site. On the other hand if done poorly Interstitial Ads can be irritating and drive away a lot of potential customers. 

 
 
  8. Mailing Lists & Newsletters: newsletters or e-flyers that are e-mailed out to potential customers often after they have submitted their email address to the advertiser. In other instances the potential customers emails are bought from information mining companies and thus the mailing lists and newsletters may be undesirable to the potential customers. In this case, the mailing ists and newsletters are a form of spam and may have a negative effect for the advertisers. If done properly the mailing list and newsletter methods may be very efficient as it targets a specific demographic that has already showed interest in the company by voluntarily submitting their email address. 

 
 
  9. Online Coupons: just like traditional coupons, online coupons are a good way of attracting new customers to the advertiser. This method is effective in that it gives the consumers a reason to visit the advertiser’s site immediately to find out more information about not only the product but the company itself. These coupons may be distributed using a variety of the advertising methods mentioned above.

 
 
  10. Other Online Advertising Methods
Some of the emerging Online Advertising methods include 
a) Blogs
b) Podcasting 
c) Product Specific forums 

Although these methods are not primarily focused on advertising, they can substantially supplement the online advertising and marketing process. 
(For more detail on these tools visit the Podcasting section).

 


 
 
Reasons for Measuring
Advertising Effectiveness
Previously we mentioned that choosing the right method of online advertising depends on the business’ GOPST needs. The next section will highlight the reasons that make measuring the chosen method’s effectiveness an important aspect of the business’s success. 
  Reasons why Companies should Measure Advertising Effectiveness:

1. Avoiding Costly Mistakes: According to emarketer.com, “Online advertising spending will reach $16.7 billion in 2006, eMarketer predicts. That's a growth rate of 33.2%, the highest growth year-over-year expected this decade.” This means that companies are spending thousands if not millions of dollars each year to advertise online, but that is not to say that it is being spent wisely. The only way to ensure that this money is not being wasted on ineffective advertising programs is to continuously evaluate the effectiveness of the chosen programs and to ensure that these programs are achieving their intended purpose. Evaluating the effectiveness of the chosen programs is not all about money, it also gives the e-marketer the opportunity to analyze the non-tangible effects of the chosen program.  For example, if a company chooses to go with a pop-up advertising program, they can evaluate it’s ROI by comparing its click-throughs to the amount of money invested in building it. However that is not the extend of it; a good evaluation program will be able to analyze the consumer’s reaction to that program, its effects on the company’s image or its effectiveness in comparison to a banner ad program.

 

 
Key
Points:
As the saying goes, "a penny saved is a penny earned." If advertisers think of the cost for efficiency testing as an investment that prevents future “costly mistakes” they can think of the prevented costs as “a penny earned” and take full advantage of the benefits of this strategy.

 
 
  2. Evaluating Alternative Strategies: Not only is it important to evaluate the effectiveness of the chosen method, but also the opportunity costs of choosing that method. Often after companies have chosen a method, they focus their attention exclusively on that method ignoring the potential profits that would have come about if they went with an ulterior method. A good evaluation program will be able to analyze the effectiveness and the opportunity costs of the chosen method. 

 
 
  3. Increasing the Efficiency of Advertising: often after companies choose a particular method, they become attached to that method and lose sight of the initial goal they were aiming for. Because the marketers know what the intended message of that chosen program is, they expect their customers to know that message as well. A continuous evaluation of the chosen program will ensure that the message the consumers are receiving from this program is aligned with the message the marketer intended to send. 

 
 
eMarketer's "Measuring Online Advertising Effectiveness" article identifies four key mega marketing and media trends: 
"1. Increasingly, when it comes to advertising and marketing, the consumer is in control; consumers are rejecting advertising they find objectionale, annoying or just plain boring; but they are seeking out ads they find entertaining or highly informative.
2. Companies are placing an increased focus on accountability and measurement of their advertising efforts; CMOs are now being held to the same ROI yardstick as their CFO and CTO counterparts.
3. Marketers are placing a greater emphasis on targeting, as a complement to their increasingly difficult-to-achieve mass reach efforts.
4. The media world continues to fragment, making it harder and harder for marketers to reach their desired target efficiently and effectively."
As a result, the internet is being used more as an advertising medium. This leads to the importance for companies to learn about advertising effectiveness to attain more consumers and a greater ROI. 
"Those marketers who aren't interested in online may be out a job - soon - if they don't prepare to engage the empowered consumer." - Richard Tobaccowala, Group EPV, Starcom MediaVest

 
 
Reasons
for NOT
Measuring 
Advertising
Effectiveness
Although measuring advertising effectiveness proved to be highly important, not all advertisers evaluate their marketing techniques. 
.

 

  Reasons why companies often DON'T measure Advertising Effectiveness:

1. Cost: the most common reason that companies provide for not measuring their advertising effectiveness is the cost of conducting a measurement program. Often companies believe that the money used for measuring their advertising effectiveness can better spent on creating more advertisements or improving their product. Although this might possibly be true, let’s consider the flip side; if the company does not measure the effectiveness of its current advertising program, they will not know if this program reaches their desired audience, sends the desired message or meets its intended goals. Being able to increase the advertising budget or improve the product will not help the company if the message is sent to the wrong audience or if the message that is comprehended by the consumers is different from the message that the company intended to send. As a result even the slightest evaluation effort can go a long way in ensuring that the desired message is sent to the appropriate audience and hence saving the company thousands if not millions of dollars.


 
 
  2. Research problems: As we will see in the sections to come, the evaluation process can be very complicated, time intensive and confusing for a company that is trying to start such an effort. In addition, it can very difficult to isolate and evaluate the effects of only one of the companies marketing efforts; as a result managers often can not justify the costs if they can’t pin point the contribution of each of their marketing efforts. For example, it might be very difficult to isolate the contribution of the company’s banner ad program from their overall marketing effort as a consumer might not necessarily make a purchase based on what they see in banner ads, but consider a variety of factors (brand image, pervious experience with the company, or an on TV) whenmaking a purchase decision. However, although it might be true that we cannot pin point the dollar contribution of one program, research can be used to evaluate the communication, reach and other factors associated with each advertising method.

 
 
  3. Disagreements on what, when and where to test: There are a variety of methods used when determining what, where and when to measure the effectiveness of an advertising program. Choosing the appropriate measurement method depends largely on the industry the firm is in, the objectives of the program based on GOPST analysis and the person that will be analyzing the results. For example, sales managers may want to measure the contribution of the advertising program on sales, whereas top executives may be interested in the effects of the program on the company’s image. These differences often lead to a great deal of confusion between the mangers and might lead them to abandon the evaluation program altogether. However, there is no rational reason for this conflict as we will later see, each of the measurement tools work to achieve a different objective. 

 
 
What 
to Test
 While putting the campaign together, the advertiser must focus on what he/she should test. 
  Factors that should be tested during the evaluation process:

1. Testing the Method: as we have previously highlighted there are a variety of methods to advertise online, choosing the appropriate method will have a substantial impact on its success. Therefore, it is important to determine how well the chosen program is working and to measure its performance against a predetermined standard. The testing process should consider the following aspects when choosing which method will be the most effective. 
 
a) Advertising Method (ex: SEO, Banner vs. sponsorship)
.
b) Subclass (ex: regular vs. content sponsorship)
.
c) Location (ex: Banner at the top or Sky-Scraper on the side) 
.
d) Time (ex: pre or post product release) 
.
e) Size (ex: Pop-up (full page) or Banner (small bar at the top of the page)) 
.
f) Vehicle Option Source Effect 

According to Advertising & Promotion texbook, Vehicle Option Source Effect is “the differential impact that the advertising exposure will have on the same audience member if the exposure occurs in one media option rather than another”.(p. 454)
.
For example, how will the same consumer perceive the same ad, if it is viewed in a banner ad vs. a pop-up ad. Some of the advertising methods have predetermined emotions associated with them (ex. pop-ups are perceived to be annoying), thus the advertiser must consider the emotional impact of the chosen method when making their decision. Thus, the advertiser must consider all aspects and options of possible methods before coming with a conclusion as to which method will be the most appropriate. 

 


 
 
  2. Testing the Content:

When an advertiser is developing a new ad or evaluating a current one, he/she must always start with an intensive analysis of the objective of the ad: its’ intended meaning, its’ desired effect on the consumers, the demographic of these consumers and it’s desired effect on brand image. Once these factors have been outlined they will serve as the standards by which the content of the ad will be evaluated. For example, if the intended objective of an ad is to get consumers to try a new product that is being launched, the marketers might test the following: 
 
a) If the ad is effective at getting the consumers attention 
.
b) If the ad is informative enough to allow the consumers to evaluate the product 
.
c) If the ad is persuasive enough to convince the consumers to try the product 
.
d) If the ad is memorable as to ensure the consumers will remember to make the purchase 
.
e) If the ad is appealing to it’s intended target market
.
f) If the ad has the desired effect on the brand image (ex: if the ad is consistent with the company’s other marketing efforts) 

 
Key 
Points:
As we just saw, choosing the most appropriate ad requires more than just  choosing the most attractive one, the most appropriate ad must be able to meet all objectives set out by the company, communicate the correct message, be appealing to the target audience and be consistent with the companies other marketing efforts. 

 
 
  3. Testing the Budget Decisions:

Finally, the advertisers often try to examine effects of their budget decisions on the ad’s effectiveness. Some of the common questions asked here are: 
 

a) Is the budget allocated to this ad campaign appropriate for its size?

b) Will a larger budget increase sales?

c) Is the allocated budget greater than the anticipated sales?

d) Should more money be spent in enhancing the current campaign? 

It is important to note that using sales as the predominant evaluation criteria is not always the most effective way of measuring the success of an ad campaign as other factors (Product, Price, Place) strongly influence the effectiveness of the chosen promotion method. A more effective measurement method should include the predefined objectives set out for the ad campaign not just its effect on sales.


 
 
Where 
to Test
After discussing why we should measure advertising effectiveness and what to test the next section will discuss where the testing should occur.
  Places for testing advertising effectiveness:

1. Laboratory Testing: In a lab testing environment, participants from the target market are brought in to be asked questions about the ad or to evaluate their reaction towards it. These questions and reaction measures will be used to evaluate the ad based on the predetermined criteria mentioned earlier. 
.
The major advantage of using this type of testing environment is the control it providers for the researchers. In this environment, researchers can easily manipulate each aspect of the ad (colour, size, format, etc.) to be able to examine the effectiveness/contribution of each of these characteristics. After examining the effectiveness of each of these aspects, the advertiser can choose ones which will be the most effective for the ad. 
.
The major disadvantage of using this type of testing environment is the lack of realism. According to the advertising and promotion book, “when people are brought into a lab (even if has been designed to look like a living room) they may scrutinize the ads much more than they would at home” (p. 456). Regardless of the lab layout, informing the participants that they will evaluate a particular car may lead them to feel that they are professional judges for the ad. This may result in the participants over analyzing the ad and leading to a variety of testing biases. Regardless of what happens in the lab, the purpose of the evaluation process is to predict the target markets reaction to the ad in its natural environment (at home, in the office…) and duplicating these environments may be impossible in a lab setting. Often, it is felt that the benefits of lab testing outweigh the drawbacks, and lab testing should be strongly considered in the evaluation process.


 
 
  2. Field Testing: As mentioned earlier, the major drawback of lab testing is the lack of realism, and field testing bypasses this drawback by testing the ad in the environment it will be viewed in including all the competition, distraction and comfort associated with that environment. For example, in a field test, researchers might go out to the participants’ homes or offices and observe their reaction to the ad. 
.
The major disadvantage of field testing is the lack of control. Using this method may not give the researchers enough information as to be able to specifically link the causes of the participant’s evaluation to particular aspects of the ad. In other words, the participants may evaluate the ad based on factors outside the attributes of the ad itself (their mood, feelings towards the company, feelings about the competition, etc.). As a result, field testing may provide biased results as it does not provide the researchers with the control as to be able to isolate external factors from the participants’ true feelings about the ad. 
Overall, the researchers must ultimately evaluate the trade-off between control and realism when making a decision as to which evaluation method will best meet their needs. 
.
Furthermore, the allocated budget for the evaluation process may play a significant role in determining which method will be used. If the marketer allocates a large budget, he may choose to use both methods as to gain from the benefits of each one. However if the allocated budget is very restrictive, the researchers may opt to use the lab testing method as it is associated with lower costs. Field testing often requires a larger investment of time and money, since it costs more for the researcher to go out on the field and meet with the participants individually rather than evaluating everyone at the same time.


 
 
When 
to test 
Evaluation of advertising tests may be conducted prior to putting the ad online or after. This section explores different methods of pre-testing and post-testing.
  1. Pre-testing: actions taken before the campaign is executed. 

"DigitalLink will allow will allow clients and their agencies to review the effectiveness of their online advertising creative before they launch a campaign."  Source: http://dynamiclogic.com/na/pressroom/releases/?id=381
 

  Methods to test consumer's reaction are:
     
  • Comprehension and reaction testing: a key concern for the advertiser is whether the ad conveys the meaning intended. Another concern is the consumer's reaction to the ad.

  • .
    Comprehension and reaction tests are designed to assess these responses. Personal interviews, group interviews, and focus groups have all been used for this purpose. 
    Sample questions asked to consumers are:
    1. Which ad did you find most interesting? 
    2. Which of these ads would interest you the most in clicking on it? 
    3. Which layout do you think would be most effective in causing  you to buy? 

    While this method offers control and cost effectiveness, there are disadvantages which limit its usefulness: 
    1. Consumer may become self-appointed expert-- sometimes, knowing they are being asked to critique ads, participants try to become more expert in their evaluations, paying more attention and being more critical than usual. The result may be an evaluation on elements other than those planned.  

    2. .
       
    3. Halo effect-- sometimes participants rate an ad good on all characteristics because they like a few and overlook specific weaknesses. This tendency (halo effect) distorts the ratings. 

    4. .
       
    5. Preferences for specific types of advertising may overshadow objectivity-- ads that involve emotions or pictures may receive higher ratings or rankings that those employing copy, facts, or rational criteria. Even though the latter are often more effective, they may be judges les favorably by participants who prefer emotional appeals.
    So how can these problems be solved?

    Some can be remedied by using ratings scales instead of rankings. Bur ratings are not always valid either. Thus, while consumer juries have been used for years, questions of bias have led researchers to doubt their validity. As a result, a variety of other methods are more commonly displayed. 

 
  • Physiological Measures: this involves a laboratory setting in which physiological responses are measured. They indicate the receiver’s involuntary response to the ad and thus, eliminating biases associated with the voluntary measures reviewed to this point. This includes:
    1. Pupil dilation- designed to measure dilation and constriction of the pupils of the eyes in response to stimuli.  

    2. .
      Dilation is associated with action; constriction involves the body’s conservation of energy. Advertisers have used this to evaluate product and package design as well as to test ads. Pupil dilation suggests a stronger interest in an ad or implies arousal or attention-getting capabilities.
       
    3. Eye tracking- viewers are asked to view an ad while a sensor aims a beam of infrared light at the eye and follows the movement to show the spot on which the viewer is focusing. This shows how long the viewer is focusing on each image and the sequence of viewing. Eye tracking can identify strengths and weakness in an ad. For example, background action may distract the viewer’s attention away from the brand being advertised. The advertiser can remedy this distraction before fielding the ad. 
 
Key 
Points:
Pretesting can help companies improve their ads and save them money before it is too late. However, many marketers the skip pre-testing because many believe being first in the market offers them an advantage over competitors, so they forgo the research. 

 
 
  2. Post-testing:occurs after the ad has been in the field. It is designed to determine if the campaign is accomplishing the objectives required and to serve as input of how well its doing.
 
  • Inquiry tests: designed to measure advertising effectiveness on the basis of inquiries generated from ads appearing in various print media. The inquiry may take the form of the number of coupons returned, phone calls generated, or direct inquiries through reader cards. For example, if you called in a response to an ad recently, perhaps you were asked how you found out about the company/product or where you saw the ad. This is a very simple measure of the ad’s or medium’s effectiveness. 

  • More complex methods of measuring effectiveness through inquiries may involve:
    1. Running the ad by time or day of the week can help manage reach.  


    2. For example, Yahoo movies section receives highest audience on the weekends. 
       
    3. Running split-run tests: in which variations of the ad appear in different websites, targeting different audience which examines specific elements of the ad or variations on it. 


    4. For example, company places same ad in different industries and measures the frequency of visitors.

 
  • Recall tests:  traditional interviews with Web users help determine recall and whether viewers remember the ads they see, as well as whether there is a “halo-effect” among ads. Scores are based on percentage of respondents who can accurately recall the ad, idea communication, and likelihood of purchase.

  •  
    However, many researchers find faults in this type of test due to:
       
    • False claiming: respondents may claim to have seen an ad when they did not. This may be a result of having seen similar ads elsewhere, expecting that such an ad would appear in the medium, or wanting to please the questioner. Interest in the product category would increase reporting of ad readership. Whether this false claiming is deliberate or not, it leads to an over-reporting of effectiveness. 

    •  
    • Interviewer sensitivities: any time research involves interviewers, there’s a potential for bias. Respondents may want to impress the interviewer or fear looking unknowledgeable if they continually claim not to recognize an ad.

    •  
    • The reader’s degree of involvement with the product: This in addition to the distinctiveness of the appeals and visuals may lead to higher-than-accurate recall scores, although in general the method may lead to lower levels of recall than actually exist.

 
 
Quantitative
Methods
Measuring the effectiveness of the internet is done by variety of methods, most of which can be done electronically.
  Exposure Measures:
.
The following measures assess the amount of exposure of the Web content through their interaction. 

     

    Hits: The number of times that a specific component of a site is requested. 

    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  webpage has been seen, but to be precise, the better term is "page views" or "page impressions."
     

    Page impressions or Page views: the number of times a webpage has been requested by the server


     

    Banner views: 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.


     

    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 $15 CPM means, $15 for every thousand times a banner is displayed. 
     

    Creative: "Ad-speak" for the actual banner graphic. 
     

    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".
     

    Click Throughs: 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 throughs to banner views. A 1% CTR means that 1% of each 1000 banner views (or 10 visitors) have clicked through. 


     

    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.


     

    Cookies: Small files written to your computer when you view a banner ad, visit a website, 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. 
     

    Run of Site (ROS): Refers to displaying a banner ad throughout a website or a banner network with no targeting by keyword or site category. Run of site advertising costs substantially less than more  targeted advertising


 
 
  Processing and Communication Effects Measures:
  1. Online measuring: firms are developing methods similar to those found in other media to measure demographics, psychographics, location of Web access, media usage, and buying habits. Clients can determine who saw their ads, determine reach, and ascertain whether the right target audience was reached. Advertisers can test the impact of their messages, receiving a report detailing impressions and clicks by time of day and day of the week.

  2.  
  3. Non-response: measures are being developed to determine where consumers go once they have been exposed to an advertisement but decide not to click on it.

  4.  
  5. Surveys: surveys research, conducted both online and through traditional methods, is employed to determine everything from site usage to attitudes toward a site.

  6. (confirmit.com is an example of a website that implements advertising effectiveness surveys)
     
  7. Panels: adapting traditional panel research is the focus of some firms that provide information on demographics, unique users, frequency of visitors, pages reviewed, and how long a viewer stays at a site (“stickiness”)

  8.  
  9. Sales: a prime indicator of effectiveness is the number of sales generated. Adding information regarding demographics, user behaviours, and so on, can increase the effectiveness of this measure. 

  10.  
  11. Tracking: some companies now provide information regarding site performance (downtime, speed, and so on) as well as analyze shopping patterns, tying demographic information to site activities, frequency of hits number of repeat visitors, etc, to assist advertisers in developing more targeted and effective messages. The information can also be used to measure the effectiveness of site content by determining how many visitors access the content, how long they stay there, and how many pages are read.

 
 
End Notes & Sources End Notes:
Although information in this section may be numbered, these numbers
 do NOT represent the importance or the popularity of that information. 
Sources:
.
Information on this page was obtained but not exclusively from:
  1. Advertising & Promotion: Chapter 17: "Measuring the 

  2. Effectiveness of Integrated Marketing Communications" 
    published by McGraw-Hill in 2003

    http://books.mcgraw-hill.com/getbook.php?
    isbn=0073049727&template=business
     

  3. Measuring the Effectiveness of Web Site Advertising

  4. page 298 in the Schneider/Perry book 1st edition
    page 189 in the Schneider book 6th edition
     
  5. Types of online advertising

  6. http://www.webeventseurope.com/Media_Buying_and_
    Online_Advertising/Article5623.aspx
     
  7. About Online Advertising

  8. http://familyinternet.about.com/od/internetsafety/a/internetads.htm
     
  9. Internet Ad Types

  10. http://www.webdevelopersjournal.com/columns/types_of_ads.html
     
  11. Ad Prices 

  12. http://www.nickles.com/media/banner_media.asp
     
  13. Disadvantages of Pop-up Advertising

  14. http://www.akamarketing.com/pop-ups-are-pop-bad.html
     
  15. Online advertising to hit $16.7 billion this year

  16. http://www.emarketer.com/article.aspx?1004078
     
  17. How to Measure Internet Marketing ROI

  18. http://www.emarketer.com/article.aspx?1004078
     
  19. Measuring Online Advertising Effectiveness

  20. http://www.chicagoima.org/on_ad_eff_white_jun04_v2.pdf
     
  21. Experts in Marketing Effectiveness Research 

  22. http://dynamiclogic.com/na/pressroom/releases/?id=381
     
  23. Yahoo Movies Has Larges Audience 

  24. http://www.doubleclick.com/us/knowledge_central/documents/
    RESEARCH/dc_bpwp_0605.pdf
     
  25. Site Audience Build at Different Rates 

  26. http://www.doubleclick.com/us/knowledge_central/documents/
    RESEARCH/dc_bpwp_0605.pdf
     
  27. Banner Ad Terminology 

  28. www.wilsonweb.com/articles/bannerad.htm
     
  29. Online Ad campaign Frequency Distribution 

  30. www.doubleclick.com/us/knowledge_central/documents/
    RESEARCH/dc_bpwp_0605.pdf
     
  31. Advertising Effectiveness Surveys 

  32. www.confirmit.com
     
  33. Click Through Rate 

  34. http://www.escalate.ca/news-003/july-28-2004-001.gif
     
  35. Consumer Online Sales 

  36. http://www.icsc.org/ecommerce/chart6.jpg