Measuring the Pros and Cons of Online Advertising

Measuring the Pros and Cons of Online Advertising Just like any other advertising medium, online advertising has pros and cons. Here are a few of the advantages to using online advertising:

You can easily test the market. If you create a brochure, you have to print and distribute it before finding out whether your campaign is effective. Response (or lack of response) on the Internet is lightning fast. You can also add a counter to your company's Web site to see how many people visit your site.
The ad campaign is less expensive. Because you don't have the costs associated with reprinting and redistribution (as you do in a more traditional campaign), the overall expense of a change is decreased.
The ad works 24 hours a day, 7 days a week, 365 days a year. It's always nice to know your advertising is working for you around the clock and around the world, so that your customers can view it at their convenience rather than any specific time.
You can change your online ad much more easily than you can change ads in other media. When you need to alter your online ad, no printing or taping is required. Just change the HTML that created the online ad and you're done in a matter of minutes.
Your customers can see your ad, shop, and buy, (if you sell your goods online) all without leaving home. It's hard to beat that sort of convenience.
You can target your audience effectively. The trick is to place your ad where the right customers can see it. If you sell exotic teas, you want to place your ad on a site that sells crumpets or cookies, rather than a site that sells motorcycle equipment to bikers. Think like one of your own customers by trying to imagine which sites they're likely to visit. Those sites are where to place your ad.

Although some techies may find it hard to believe, you do have to consider some disadvantages to online advertising, including the following:

It's too measurable. You can gather more statistics than a baseball team. Worse, some of the click-through rates (the number of times people click on the ad divided by the total number of times people see an ad) are low - often 1 or 2 percent or even less. That means hardly anyone who sees your ad clicks on it and visits your Web site - or buys your product. Online advertising is still in its infancy.

A few years ago, advertisers believed that increasing the number of people who saw an ad would increase the likelihood of a sale. The thinking was that thousands of eyeballs looking at an ad would translate into hundreds of sales. Not necessarily so. A bit later, everyone decided that increasing your click-through rate would increase the number of sales. But that wasn't entirely true either. Currently, advertisers think that the only real measurement of an ad's success is to count the number of people who actually buy a product. The point is that because people don't really understand what works yet, they collect every possible statistic. But not all statistics are useful. As of this writing, nobody knows for certain which statistics will prove to be the most valuable.

Some major ad agencies (and Wall Street) are losing confidence in online advertising. The Internet is still so new that the advertising world simply doesn't know yet which advertising methods work best. You do have, however, some good news. Few deny that in the future some form of Internet ads (perhaps combined with TV) will be both powerful and effective. People are figuring it out fast.
Customers are experiencing advertising overload. One problem with online ads is the incredible amount of clutter on most Web pages. Every advertiser wants consumer attention, but readers simply have too much information to digest. Often, they choose to ignore ads - and that is what leads to low rates of return.

Even with its disadvantages, the Internet is turning into a tool that surpasses the wildest dreams of ad execs. The radio took 38 years to reach 50 million users. Television took 13 years to reach 50 million viewers. And the Internet took just 5 years to reach the same number of users - a stupendous achievement.

The Internet is a social technology. As your site grows, you can offer chat rooms and e-mail newsletters (not to mention a plethora of other options). Electronic groups are effective and fun as well. People like a sense of community, and the Internet offers that. In the end, all that interactivity means that you can sell people what they want and not just what is left over in stock.

That's not just good - it's right. Happy, engaged customers are the Heisman Trophy of the advertising world.

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