Internet Advertising

The ultimate effectiveness of any marketing channel can be measured by the extent to which the channel influences a consumer to purchase a product or service.  For example, the effectiveness of the Internet as a promotion channel can be judged by how well the intended message and persuasion have been perceived by the consumer, as reflected in the consumer’s response. The Web, as a marketing channel on the Internet, needs measures of advertising effectiveness in order to help managers plan their media investments.  In fact, the successful Web sites all provide audience measurements, with many of the measurement data supported by third party sources (Fitzgerald, 1998).

Realizing the importance of audience measurement, research has recently turned towards development of new tools and methodologies to measure Web advertisements. Our focus in this section will be the discussion of some of the current measures, the challenges and the future trends in Web advertising measurement.

Web Advertising Measurement Terminology

The measurement typically used for traditional advertising is the cost of reaching an audience (cost per thousand, abbreviated as CPM), based on circulation for print media and projected viewing audience for television (Zeff et al., 1997). Being a new medium with new capabilities, the Web has spawned new measurement terms. We give below brief definitions of some of the popular terms used in Web advertising (Zeff et al., 1997; Novak et al., 1996).

1.   Hit: A hit is a record of each time a file is requested from a server. If a Web page consists of eight graphics as well as text, nine hits would be recorded each time that Web page is requested.

2.   Request: A request is a connection to an Internet site that successfully retrieves content.

3.   Visit: A visit is a series of requests made by one user during a specified time period. If a user stops making request for a given period of time, the next request is counted as another visit.

4.   Unique visitor: A visitor who could be identified by information provided through a registration form or some other identification system.

5.   Exposure: It is the number of times a visitor to a site is exposed to a particular advertisement. An exposure is counted each time an advertisement is delivered by a Web server.

6.   Reach:  This is the total number of unique visitors exposed to a Web advertisement.

Click-through: This is a count of the mouse-clicks on a “hot-linked” advertisement such as a banner or button. This is also called as the “Page Information Requests”.

Challenges in Web advertisement measurement

A number of Web sites use “hits” to indicate their popularity. Hits are not always valid measures of Web traffic as they are inherently non-comparable across Web sites (Novak et al., 1996).  A request gives a more conservative estimate as it reflects only those requests satisfied by the server. 86% of Web publishers use CPM as the basis for Web advertisement pricing (IAB, 1997).  Though exposure gives an estimate of the number of times the advertisement was shown to the consumer, it does not reflect the consumer controlled environment of the Web unlike traditional broadcast media like the television. Click-through measures the actual exposure and activation of an advertisement content by a consumer.  But, Web publishers argue that click-through is not under publisher’s control and depends on the creative nature of the advertisement. Some researchers point to the use of reach and frequency estimates if the goal is to engage in “brand building” (Leckenby, 1998). The complexity of the Internet and the innovative Web advertising models, like advertorials, add to the difficulty in measuring consumer response to Web advertisements.

Web advertisement viewership is also determined through ratings, i.e. the number of Web users exposed to a particular advertising site or advertisement.  Ratings are done by Web rating companies like Media Metrix, Net Ratings, Relevant Knowledge and Nielsen Media Research. Lack of standard measures result in different media rating companies producing conflicting results.  For example, the lists of the top 25 Web sites put together by Relevant Knowledge and Media Metrix shared only 19 names (Ratings, 1998), and even the shared names were not in the same order. (Novak et al., 1996) argue that a standard methodology is essential to understand the effectiveness of the Web and exploit its full potential. They recommend a set of metrics developed from considering the Web as a unique hybrid of direct response and traditional communication medium. We feel that some of the challenges to be addressed in Web advertisement measurement are:

1.   Standardization of Web traffic measurement terminology;

2.   Development of new models to understand and measure consumer response to interactive advertisements; and

3.   Using resident programs like “cookies” or “session logs” to capture useful consumer information without duplicating the data and without violating consumer privacy rights.

Future trends in Web advertisement measurement

Recently the Internet Advertising Bureau (IAB) and Digital Marketing Group (DMG) were reported to be close to agreeing common measurement standards for Internet advertising on an international level (Beyaztas, 1998).   The agreement is backed by the Incorporated Society of British Advertisers and the Institute of Practitioners in Advertising.  The standards are expected to create a common global language for buyers and sellers of Web advertising and thus go a long way in removing the current confusion. Third party auditors are also coming on the scene to verify and possibly certify Web advertisement statistics released by Web site publishers. Non-profit organizations and research institutions also have begun to contribute more to the measurement of Web traffic and Web consumers’ online habits. It will require all players to come together to evolve standard measurement and reporting techniques, and to develop fully more credible Web advertisement measures as every one of them have a significant interest in realizing the full potential of the Web.