Internet Advertising Analysis Part 5; Impression Measurement, Internet Advertising Metrics
Impression Measurement: What Are the “M”s in CPMs?
Currently no clearly defined consensus exists on what should be measured online. In the beginning (all four-plus years ago) the measure most often cited was “hits.” Roughly speaking, any time a user requested data from a Web page, a hit was recorded. This metric was soon outmoded, as several hits may be recorded each time a Web page is seen if the user requests more than one item from that page or if the user repeatedly clicks on a link without knowing that a request has already taken hold. “Pageviews” came next. A pageview results each time a page is viewed. This measurement was considered superior to hits because it eliminated the double-counting of hits noted above. However, a single user could view a page numerous times with little incremental benefit for the advertiser, and the “Back” function available on browsers made pageviews a particularly weak means of measuring traffic. As a result, pageviews were soon out of fashion, replaced by “visitors.” “Visitors” is the number of people who visited a site rather than the number of pages seen. And “unique visitors” (simply a nomenclature change) soon replaced “visitors” as the standard metric for measuring the attractiveness of a Web site.
Performance Measurement “One of the bedrock problems is a lack of trustable research. There’s no bedrock yet in this medium, like in television, where there’s been 40 years of research to show what a 30-second spot can do.” Rich Glassberg, Vice Chairman, Internet Advertising Bureau The Internet community has grappled with the above metrics to determine the merit of Web sites, but advertisers must go even further to attempt to gauge how successful their campaign is. By itself, a pageview or a visitor does not necessarily mean that an ad has been viewed. Advertisers are demanding more information on the success of their Internet campaigns. For that reason, they have shifted toward a return-on-investment (ROI) measurement system.
Some of the current Internet advertising metrics being used today are:
• Click-Throughs: The number of times that consumers click on an advertisement. The Cost-per-Click is the amount spent by the advertiser to generate one clickthrough. The Click-Through Rate (CTR) is calculated by dividing the number of click-throughs by the number of impressions served. This gives the rate at which consumers are clicking on an ad.
• Cost-per-Action/Lead (CPA/L): The amount spent by the advertiser to generate one lead, one desired action, or simply information on one likely customer. This information is sometimes obtained through a contest or a literature request form. The advertiser pays an amount based upon the number of individuals who enter the contest or fill out the form.
• Cost-per-Sale (CPS): The amount spent by the advertiser to generate one sale.
Advertisers pay an amount based upon how many consumers actually purchase something.
Table 3 New Internet Users’ Likelihood of Clicking on Banner Ads
Continue with:
Part 6 ; Calculating CPM and CPM Pricing , Part 7; Effective CPM is currently the only statistic on which comparisons can realistically be based ,
Part 8; New Vs. Old Media: A Big Market from Which to Gain Share , Part 9; Internet Advertising; Right type of Medium and Targeting ,
Part 10; Broadband brings Rich Media , Part 11, Rich Media Studies , Part 12; What Could K.O. Internet Advertising? , Part 13; Email ,
Part 14; Advertising or Direct Marketing? , Part 15; What Does the Internet Advertising Market Consist of? , Part 16; Rich Media still has some drawbacks ,
Part 17 Inventory and Concentration , Part 18; Market Share and Concentration Data , Part 19; Global Impact, Part 20; Residential and Business Use ,
Part 21; Pageviews , Part 22; Advertising vs. Direct Marketing , Part 23; Investment Conclusion
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