Internet Advertising Effectiveness

The article examines the effectiveness of online advertising. It provides an overview of advertising types and several experiments. The problems of measuring online effectiveness are outlined.

Online advertising is a powerful tool that has absorbed the strengths of several communication channels at once, such as traditional media (print + radio + television) and direct marketing. Online advertising is primarily distinguished by its relatively low cost as a means of development, wide audience reach, a large selection of target groups, and selectivity.

The advantages of online advertising include the fact that it is easy to target an audience based on a variety of parameters, such as the user's geographic location (country, city), the user's socio-demographic characteristics, the time spent using the computer, familiarity with advertising, etc. It is important to note that the network can not only target advertising in a certain way, but also collect and analyze detailed information about users that is very valuable to the advertiser, performing so-called tracking and recording the number and quality of users who have made contact with the advertisement, the number of advertisement impressions, the number of clicks, the dynamics of contacts, etc. Analysis of such information allows companies to quickly adjust advertising activities and increase their effectiveness.

In addition to all of the above, it is worth adding that Internet advertising is a very simple and accurate tool for measuring the effectiveness of advertising activities. Below, we will consider the most frequently used types of advertising on the Internet: a website, banner and contextual advertising.

Website (Order a website from us) 
A website, or simply a site, is a set of documents of an individual or organization united in a computer network under one address (domain name or IP address). Any Internet site in itself is already an advertisement for the company or product to which it is dedicated. When posting information on a website, there are no such volume restrictions as on printed newspapers and magazines, on radio and television. You can post as many materials of as large a volume as you like.

What is very important is that posting information on a website is a fairly inexpensive way to distribute it. At the same time, the information becomes available to an audience located anywhere in the world.

Website visit statistics are obtained using registration programs. Hits and hosts are usually recorded. Hits (hit, visit) are the total number of visits to a website for a certain period of time, for example, a week, month, etc. Hosts (host, site reach) are the number of unique visitors.

With the help of automatic statistics, you can also get information on the user's geographic location, time of entry to the site, interest in this or that information, etc.

Thus, statistics allow you to track the effectiveness of the site in terms of the number of visitors - representatives of the target audience.

Such data allows you to work on the content, optimization and promotion of the site in order to increase its efficiency. If the site sells goods or services, you can track its efficiency in relation to sales using the CTR (Click-Through Rates) indicator. It is the ratio of the number of “clicks” to the number of impressions. CTR is measured as a percentage. It can be represented as follows:

CTR = Number of clicks / number of impressions x 100%.

For example, as part of an advertising campaign, 2,000 people visited the site and clicked with the intent to buy 18 times.
Accordingly: 

CTR = 0.9% (18 / 2000 x 100%).

In the same way, you can calculate the efficiency coefficient of the site using the number of actual purchases instead of the number of clicks.

When assessing the efficiency of a site, it is important to understand that it simultaneously performs the functions of two types of advertising - selling and image. The latter (which also affects sales) cannot be assessed using operational statistics. To obtain the results of the impact of the site on the attitude to the product, on the memorization of the brand, etc. additional research is required.

Banner advertising
A banner is a graphic image similar to an advertising module in the press, but it can contain animated elements, as well as a hyperlink to the advertiser's website or page.

Banner effectiveness is also calculated using the CTR indicator.

For example, as part of an advertising campaign, a banner was shown 1000 times, and it was clicked on 114 times. Accordingly:

CTR = 1.14% (114 / 10,000 x 100%).

On average, effective banner advertising gives a 0.1-2% response. Sometimes CTR can reach 10%. In this case, it will be highly effective. If CTR is less than 0.1%, then this is considered a sign of low-effective advertising.

When calculating the effectiveness of banners, as in the case of a website, it should be borne in mind that they simultaneously perform the functions of two types of advertising - selling and image. Interestingly, according to research by Millward Brown, awareness of advertising is "96% driven by the consumer's exposure to the banner and only 4% by the consumer's click-through to the advertiser's Web page. This relationship between exposure and clicks holds true not only for awareness but for other measures of brand reinforcement as well.