EFFECTIVENESS OF INTERNET ADVERTISING Essay

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 â€Å"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: â€Å"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 betw een 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 â€Å"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. â€Å"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. â€Å"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 â€Å"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 the number of people who see the campaign (â€Å"reach†) at an optimal number of exposures to the ad per person (â€Å"frequency†). All too often, however, when advertisers do  not manage their online campaigns closely for this, the result is that a relatively small number of people will see the ads at a tremendously high frequency, wasting many impressions of the campaign. Reach and frequency have a proportional relationship. Each ad impression in campaign is shown either to someone who has not yet seen the campaign, thereby expanding its reach, or to someone who has, increasing the campaign’s average frequency. The â€Å"optimal frequency† – the ideal number of times consumers should be exposed to the campaign’s online ads – is ambiguous. Little research exists on the subject, and results will vary according to the product, campaign objectives and other factors. That said, conventional wisdom is that the optimal frequency for most campaigns is around 4-7 ad exposures, and much beyond that, results hit a point of diminishing returns for both brand and direct response objectives. The challenge for marketers, therefore, is to reach effectively that third of the audience generating only 6% of all pages, while avoiding having heavy users to consume ad impressions at disproportionately high frequencies. The Figure above illustrates the challenge. It graphs a campaign where 37% of the audience sees only one exposure of the ad, 17% sees it twice, 10% sees it thrice, and the distribution gradually diminishes so that only 1% sees the ad 10 times. But then something remarkable happens: 13% of the exposed audience sees the ad 11 times or more. By the time someone has seen an online ad 11 times, the odds that further exposure will improve the person’s opinion of the brand, or likelihood to click on the ad, are low. In other words, 40% of the impressions in this campaign represent money largely wasted. 3. Manage Reach and Frequency through Strategic Media Placement The critical question then is, â€Å"How does one control frequency to maximize reach?† One way is to set a â€Å"frequency cap† with the publisher’s or advertiser’s ad server, using cookies to prevent readers from seeing an ad more than a designated number of times. For a variety of reasons, however,  capping frequency via ad servers can be more difficult in practice than in theory. A more efficient way to control frequency can be through strategic media buying tactics. Back in 2002, the research firm then known as Jupiter Media Metrix demonstrated that an ad campaign of four million impressions could reach an audience at least a third larger when spread evenly over three large sites as opposed to concentrating the same-sized buy on a single site. The key implication was that a broader media buy across several sites was a more efficient way to optimize reach, and moderate frequency, than by concentrating the same number of impressions in fewer sites. The Figure above shown is known as a â€Å"build chart†, showing the varying rates at which audiences accumulate to their monthly total on different types websites. The comScore data show that the audiences for website services and portals scale very quickly: roughly 80% of the monthly accumulated audience to those sites had already visited by the seventh day of the month. At real estate sites, meanwhile, only 35% of the monthly audience had visited within the same one-week period. Sites whose audiences build quickly are likely to attract visitors who come back often, meaning advertisers risk burning through a lot of ad impressions at high frequency levels if their ad buys are too concentrated on these types of sites. Sites that are not as â€Å"sticky†Ã¢â‚¬â€œ with flatter build curves – may have altogether smaller audiences, but campaigns directed towards them will naturally be distributed more evenly across all visitors. The best strategy, therefore, is not to avoid any type of site, but to spread campaigns over multiple sites in order to most efficiently distribute campaign reach at a lower average frequency. 4. Use Rich Media and Video Ad Formats Rich media ads are significantly more effective at engaging users than are standard GIF or JPG image ad formats. These rich media ads are typically formatted in Flash or enhanced-Flash (i.e., specialty rich media ad platforms like DART Motif), with features such as the ability to expand outside of standard ad dimensions, to float across the top of web pages, or to play video clips. Analysis of DART ad-serving logs show that more interactive and prominent rich media units have far higher click rates than standard image ads. The above showing Figure indicates that ads formatted as expandable or in-page units using DART Motif’s rich media platform had more than double the click-rate of image ads, while interstitials (ads, typically large in size, that appears on pages in between two content pages during a user’s surfing session) had more than 10-times the click rate. Motif floating and pop-up ads had close to 50-times the click rates of image ads. To persuade consumer’s positively towards brand attributes, rich media and formats (particularly video) are considerably more effective than the image ad formats. Campaigns served in the platforms of speciality rich media ad providers at least 50% more effective at improving purchase intent than were GIF/JPG image ads(relative to control groups who saw public service announcements), according again to data drawn from Dynamic Logic’s Market Norms, a pool of hundreds of brand research studies. 5. Target Audiences With Appropriate Creative Treatments Another challenge for online ad campaigns is that many agencies have one team, or even one subsidiary company, doing the creative design of ads, and another buying placements on media properties. There may be advantages to this kind of division of labour, including concentrating fields of expertise and cost efficiencies. But the trade-off is that the creative is not always ideally suited for the audiences that see it and the environment where they see it. Closing that gap and better aligning creative executions to the right audiences and environments can have a dramatic impact on campaign effectiveness. â€Å"As you would think, the clients who come on our site and talk about exotic travel, outdoors and environmental issues, and have the creative to go with that, their results can go through the roof,† said Mr. Ryan of NationalGeographic.com. â€Å"Dolby Laboratories, working with the agency Freestyle Interactive, ran a rich media campaign with us,† Mr. Ryan continued. â€Å"I looked at the insertion order and said, ‘Dolby? Okay great, let’s get the business,’ but I wasn’t sure what they wanted with National Geographic’s audience. Then I saw the creative, two interactive ads, one with an electrical storm, and another morphed from the jungle scene to an ocean with the slider bar that changed the sound. The response rates were huge because the ad’s theme was highly relevant to our audience. The campaign metrics, shared by Dolby and Freestyle Interactive, shown by Mr. Ryan was talking about, as seen in the Figure below. RESEARCH DESIGN Research Design The objective of the study is to understand the Effectiveness of Internet Advertising. Research Design Case based research design Data Collection Method Secondary Data Sources of Data Collection There are two sources on which data can be collected via primary source and secondary. The data which are prepared from the main purpose and researcher or owner it is called primary source and the collected from this source is called primary data. The data which is collected from the persons, private bodies, private research agencies etc are called secondary source and the  data collected is from both primary and secondary type. The following are the data from which have been collected from both the sources. Secondary Data is collected through internet, magazines, newspaper and published sources at the various companies. SAMPLING Sampling Sampling is a most important part of the data collection. It is a tool that tries to matches the data according to the criteria. The sampling methods is used specially in the context of data segregation researcher in the field of market research scientific investigation and other fields study where it requires a deep ground selection investigation and other fields study where it requires a deep ground selection of variables. So, sampling is a relevant answer to the accurate and most appropriate selection. JUDGEMENT SAMPLING The judgment sampling is a kind of non-probability sampling where the researchers select the samples from according to its judgment. The criteria have been fixed previously before taking into consideration of the samples. The judgment sampling is one of the most important parts carrying out in any project work. SAMPLING METHOD In this project study, the method adopted for the sampling purpose is the judgment sampling method. SAMPLING SIZE If the sample is too small, it can’t represent the population and outcome will be far more reality. Large samples provide good result, but if sample is too large, it become difficult to handle and also expensive, but in this project samples are taken those involve in web advertising sector. DATA ANALYSIS We identify processes that underlie curiosity resolution and study its impact on consumer motivation and learning. The dataset from our simulated Internet experiment includes process tracking variables (i.e., click stream data from ad-embedded links), traditional attitude and behavioural intention measures, and open-ended protocols. We find that an advertising strategy increases interest and learning relative to a strategy that provides detailed product information. Furthermore, it seems to improve the quality of search substantially (i.e., time spent and attention devoted to specific information), resulting in better and more focused memory and comprehension of new product information. To enhance the effectiveness of Internet advertising of new products, we recommend a curiosity advertising strategy based on four elements: (1) Curiosity generation by highlighting a gap in extant knowledge, (2) The presence of a hint to guide elaboration for curiosity resolution, (3) Sufficient time to try and resolve curiosity as well as the assurance of curiosity- resolving information, (4) The use of measures of consumer elaboration and learning to gauge advertising effectiveness.