Psst! Banner Ads Work

Here’s the latest scoop from Media
AdRelevance division: banner ads are
effective in driving traffic to companies’ Web sites.

Okay, so it may not be news for folks in the online advertising business,
but, for the non-converted, the new study might be enough to convince some
that were hesitating to go ahead and try this newfangled advertising
medium. And those dot-com companies looking at cutting back online
advertising during the current market downturn might drop offline
expenditures instead, if they knew how effective (and cheap) online
spending could be.

In a study between July 1999 and April 2000, AdRelevance looked at post-IPO
companies — some of whose ad budgets are now under scrutiny as their stock
price slides and their burn rate must be slowed. And the company found a
strong and positive correlation between total impressions bought and the
number of unique visitors to their sites.

The report found that the correlation between average impressions and
average traffic was 0.81, with -1 indicating a perfect negative
correlation, 0 indicating no correlation, and 1 indicating a perfect
positive correlation.

“All Internet advertisers hope and pray that their online ad expenditures
translate into increased site traffic,” said Charles Buchwalter, vice
president of media research for AdRelevance.

“Any thoughts of aborting online advertising campaigns in light of the
recent market downturn should be reconsidered.”

AdRelevance gives the example of, which launched a new ad campaign
three months after its IPO, which, at its height, reached 6.9 million
weekly impressions — 590 percent higher than in recent weeks. At the
launch of the campaign, with 1,800,000 impressions in a week, the company
got 370,000 unique visitors over the same time period.

Eleven weeks into
the campaign, though, the number of visitors soared to 1,085,000 while
weekly impressions numbered 12,000,000. At the end of the campaign, the Web
site was seeing 935,000 unique visitors a week, with an impression count of

“As online advertising continues to be relatively inexpensive and
increasingly effective, we believe the next wave of dot-com winners could
well come from those firms that continue to intelligently invest in online
advertising strategies,” said Buchwalter.

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