EFFECTIVENESS OF INTERNET ADVERTISING

Topics: Advertising, Pay per click, Online advertising Pages: 8 (2305 words) Published: April 13, 2014
Introduction:
Effectiveness of Internet Advertising

Web advertising first appeared in 1994. Eleven years later, in 2005, U.S. companies spent $12.5 billion advertising online. No longer is that the irrational money of venture-backed start-ups with dubious business models; according to Nielsen/NetRatings, 25% of all display ads in 2005 promoted Fortune 500 companies. Advertisers already spent double the amount online that they spent in 2005 on billboards and other outdoor advertising and roughly half of what they spent respectively on magazine and radio advertising. And after brief market contraction in 2001 and 2002, the online ad industry has been growing 30+% from then.

Yet, despite this rapid mainstream of online advertising, many advertisers still are not observing a range of established tactics and strategies understood to substantially improve the effectiveness of online ad campaigns. In some cases, this is because advertisers are new enough to the internet to remain behind on the learning curve.

In other cases, many advertisers have viewed the Internet as a source of “cheap” advertising and therefore do not invest sufficiently in experimentation and research to identify for themselves the tactics that work best.”Sometimes advertisers are pennywise and pound the foolish in not running brand effectiveness studies and using the click-through rate to measure the success of a brand campaign,” said Yaakov Kimelfeld, director of business intelligence and Beyond Interactive. Brian Eakin, Associate Media Director at Freestyle Interactive, concurs: “While many clients will say that there is value in learning, the clients most in need of actionable research and most connected to a cost-per-sale measure of success, and many of them simply would not allocate the investment that does not mean immediately contribute to product sales. The challenge of planners is to extract the strategic insight from active campaigns without forcing their clients to choose between sales and learnings.”

Online advertising remains new and fast evolving. But after a decade, it has been around long enough for several best practices to emerge. It is actually a major trend in recent years is a shift towards generating incremental page impressions. The result is online ad prices are going up, and it may no longer be as a “cheap” advertising medium. It remains, however, and effective one. As such, it is more important than ever for advertisers to master the tactics that produce the best results for their campaigns.
Here are some practices that can optimize the web designing effectiveness.

1. Adopt a Disciplined Framework for Managing Campaigns

The most successful online advertisers adhere to a disciplined process. They set clear campaign objectives. They build measurement, targeting and optimization into the campaign process. And they carefully assess the final results to identify what practices could improve the advertiser’s next campaign.

“If you ask any publisher, they’ll tell you that the spread between response rates to ads can range from 0.02% to 2%,” said Ted Ryan, vice president of sales at NationalGeographic.com. “That’s a hundredfold difference. That’s what the opportunity is online. Getting best practices right from online ad campaigns isn’t about a 10% improvement in results. It’s about a tenfold or a hundred fold improvement. You can’t afford not to be online. For all that money advertisers invested on TV on brand campaigns, they can get knocked out of water in five minutes on internet by a competitor who does it that much better than they do.”

2. Manage Reach and Frequency

Very little will have as dramatic an effect on the success of advertiser campaigns as managing “reach and frequency.” Whether a campaign’s objectives are more geared towards brand development or direct response, in almost all cases it is in the advertiser’s best interest to maximize...
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