Psst! Banner Ads Work

Here's the latest scoop from Media Metrix' 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 Women.com, 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 10,000,000.

"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.