Measuring Online Advertising Effectiveness - Banner Ads

This page last updated 2006 Oct 31

Chpt 8

"Measuring the Effectiveness of Web Site Advertising" page 298 in the Schneider/Perry book 1st edition page 189 in the Schneider book 6th edition "As more companies reply on their web sites to make a favourable impression on potential customers, the issue of measuring web site effectiveness has become more important"   KEY POINTS We need to be able to get a grasp on measuring the effectiveness of promotion online in order to be able to justify the cost in terms of new customers obtained determine the results, compared to traditional methods track results so that the activity can be altered or changed if it isn't working WTGR

Chpt 4

"Banner Ads" page 156 in the Schneider/Perry book 3rd edition "When banner ads first appeared on the Web in the mid-1990's, they provided a new experience for Web surfers. As users saw more ads, however the ads lost their ability to attract attention. Click-through rates, which had been as high as 2% when banner ads where first introduced, have steadily dropped and now range from .3% to .5%, depending on the site's content".   KEY POINTS A click through rate of .5% means for every 200 people looking at your page, only one will click on the banner.  If the %'age of the number of people who actually click on the banner, buy something - is in the range of 2% - 5%, then you need about 10,000 views of the page to get 50 click throughs to get one buying customer. Obtaining 10,000 views is not an easy thing to do in a competitive environment where the number of web pages and the amount of content is growing very fast. WTGR

Banner Ad Terminology by Dr. Wilson
the original list is at www.wilsonweb.com/articles/bannerad.htm

Hits -- A fuzzy term meaning the number of times a webserver has been "hit" by a request for a webpage or a graphic image. 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 -- Refers to the number of times a webpage has been requested by the server.

Banner views -- Refers to 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.

Banner ad -- An ad graphic hyperlinked to the URL of the advertiser. These are usually animated GIF images, though we are seeing an increasing number of MacroMedia Flash banners. The full banner size is 468 x 60 pixels, and most sites limit the file size of the graphic to 12K to  16K. The Internet Advertising Bureau (IAB) specifies eight different "standard" banner sizes.   http://www.iab.net/iab_banner_standards/bannersource.html

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

  Prof. W. Tim G. Richardson © www.witiger.com