Web ads build
brand and drive sales
conversion rates among return visitors
By Marty Beard
In theory, advertising on the web ought to be highly effective: Just to
begin with, you have captive eyeballs, without the distractions of radio
and TV. And you can actually track whether ads are seen and responded to.
Trouble is, theory alone isn't worth too much.
Now there's research that backs up this thinking.
It comes from Avenue A, an internet marketing firm, and it concludes
online ads are effective in three critical areas: raising brand awareness,
driving traffic and sales, and boosting offline sales.
Avenue A researchers reached these conclusions after
following actual users in their behavior.
The study further
asserts that using click-through rates to evaluate the effectiveness of an
online campaign disregards the rationale behind advertising.
honest, I think theyíre focusing on the wrong metric," says
Young-Bean Song, the studyís author and Avenue Aís director of
analytics, referring to most of online advertisingís critics.
"When you compare
click-through rates with conversion rates, thereís absolutely no
correlation. If you put an attractive woman wearing very little clothes on
a banner, youíre going to get an extremely nice click-through rate. But
when you look at the conversion rate youíre not going to sell a
which mixes in-house research with findings from other recent reports,
makes what these days comes across as a radical declaration even as it has
been consistently backed by research: Online
advertising is effective.
First, Avenue A claims
that online ads are good for boosting sales and traffic.
To back up this claim, the marketing company tracked the
behavior of web surfers who were exposed to an ad for an internet travel
company, and found that people who saw the ad generated 10 percent more
sales and traffic than people who didnít see the ad.
Additionally, Avenue A
asserts that online advertising can ramp up off-line sales. Citing the study
released last fall by Forrester Research
(see "Much-abused banner gets a respectful nod"), the Avenue
A report notes that sales of an impulse food product increased by 19
percent among web users exposed to an ad for it.
And as exposure to the
ad increased, so did the productís sales. People who saw the ad seven to
10 times were 28 percent more likely to buy the impulse food than people
in the control group
The Avenue A
report posits that online advertising builds brand awareness, referring to
a study by online research company Dynamic Logic that found that internet
advertising increases brand awareness by an average of six percent.
scrutinized an internet campaign for online travel site Travelocity, and
found that the campaign boosted brand awareness overall by 16 percent.
People who were exposed to Travelocity ads four or more times became 44
percent more aware of the brand name.
And a Next Century Media
study, according to the Avenue A report, determined that web users who see
a sponsored site are more likely to think about buying the sponsorís
Also, the report
says, internet advertising helps advertisers keep and acquire customers.
Avenue Aís own research, 13 percent of users who click on ads are people
who have already been to the advertiserís site. Plus, the conversion
rates were nearly 250 percent greater among people who had previously
visited a web site than among first-time visitors.
Song therefore suggests
that for effective online campaigns, advertisers should recognize the
differences between their customers when they craft their campaigns.
most people are doing the dumbest form of targeting: Theyíre not
targeting at all," he says.
By using existing
ad-serving technology, he adds, it is possible to distinguish first-time
visitors from longtime customers. And advertisers should have different
goals in mind for different visitors and run multiple campaigns to
get the most out of internet advertising.
For example, a content
site can target ads to entice people who have never been to a web site to
read its free content. Those readers, in turn, could see ads attempting to
persuade them to sign up for a free trial of the siteís
kind of intelligence and targeting that you canít get with any other
vehicle," Song says. "The true power of the internet is when you
start actually differentiating between people who have actually been to
your web site and havenít been to your web site."
Advertisers would also
do well to stop focusing on click-throughs, which are declining given the
sheer volume of impressions that are being served.
This is not to say
that click-throughs are inherently worthless, however.
Song notes that click-throughs,
web site visits, registrations, email address captures and actual sales
and conversions are the main goals of online advertising.
"All of those are
just different interactions that youíre going to have with your users,
and a click-through rate is probably the most benign of all five of
those--and probably the least impact-ful for most e-commerce
clients," Song says.
effects of online advertising have been generally lost in recent months
amid a flurry of bad economic news for dot.coms and a continuing glut of
inventory on the web.
"A lot of the press
thatís disparaging online internet advertising has really not been
directed in the right way," Song says. "You see people spending
more time online and youíve got to believe that the dollars will
Beard is a staff writer for Media Life
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