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.

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