Best Practices for Optimizing Web Advertising Effectiveness

Web advertising first appeared in 1994.1 Eleven years later, in 2005, U.S. companies spent $12.5 billion advertising online.2 No longer is that the irrational money of venture-backed startups 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.3 And after a brief market contraction in 2001 and 2002, the online ad industry has been growing at 30+% for the past two years.

Yet, despite this rapid mainstreaming 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. “There are still a wide range of experiences out there,” said Arthur Rotberg, ad production manager for CondeNet. “Of course this is rare, but I just got an email from a sales assistant asking if a client could mail their creative on a disk. At that point alarm bells go off. The creative is probably not in the right format for online serving, most likely it’s a PDF of an ad the client did for a print campaign.”

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 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 at 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 are frequently the companies most connected to a cost-per-sale measure of success, and many of them simply won’t allocate investment that doesn’t immediately contribute to product sales. The challenge for planners is to extract 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. As observed in the popular DoubleClick® paper, “The Decade in Online Advertising,” a major trend in recent years is a shift towards a seller’s market, as new ad dollars come into the market more quickly than users are generating incremental page impressions. The result is online ad prices are going up, and it may no longer be seen as a “cheap” advertising medium. It remains, however, an effective one. As such, it is more important than ever for advertisers to master the tactics that produce the best results for their online campaigns.

Best Practices for Optimizing Web Advertising Effectiveness

1. See details in DoubleClick’s paper “The Decade in Online Advertising” (2005)

2. According to the Interactive Advertising Bureau (IAB) and PricewaterhouseCoopers

3. According to the Outdoor Advertising Association of America, the Radio Advertising Bureau and the Magazine Publishers of America

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