An Expensive Test To See How Well Online Ads Work

from the apparently,-they-work dept

One online retailer decided they wanted to judge how well their online advertising program was working, so, as a test, they pulled all their online advertising from April through July. They discovered that the online advertising seems to be pretty important, as their online sales fell 45%. Ouch. Sounds like an expensive "test". Since putting the ads back online, online sales are starting to creep up again, but are still below previous levels. Prior to the test, online sales accounted for 26% of their overall revenue, so the loss of online ads apparently cut out quite a chunk of their sales volume. Of course, if they're spending too much on the ads, this doesn't matter - and the company did realize that online ads seem to give them a lower return than offline ads, saying that for every $1 in online advertising they spend, they're getting $2 in sales. While not a perfect study, it does shed some light on the impact of internet advertising.

2 Comments | Leave a Comment..


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  1.  

    Ad tracking, duh

    identicon
    mark, Aug 7th, 2003 @ 7:28am

    Maybe they should have looked at their referrer logs first, or somehow tracked sales with a dedicated phone number.

    I'm an independent web developer and it's an uphill battle to convince my clients to invest in measuring their ROI, or even general site usage.

    reply to this | link to this | view in thread ]

  2.  

    Top-line lunacy

    identicon
    Doug, Aug 7th, 2003 @ 9:23am

    for every $1 in online advertising they spend, they're getting $2 in sales
    So either they have over a 100% mark-up just to cover their online advertising, or else they lose money on every online sale.

    reply to this | link to this | view in thread ]


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