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Measuring Online Ad Effectiveness

MARKETERS have long said they would increase their online advertising budgets if Internet sites would do what they promised to do years ago: quantify the effects of an ad campaign on sales, brand awareness and other factors like the consumer's intent to buy.

With each passing month, online companies are increasingly able to do just that. The question is, will marketers actually respond?

Google is the latest Internet company to make good on the promise. A new feature allows advertisers to copy a string of software code from Google's Web site onto pages of their own sites. When users click on the advertiser's link from Google's Web site, Google follows the user's progress. Like other companies, Google does not collect personally identifiable information on the user.

Advertisers can log on to Google to view graphs showing how many visitors bought an item, signed up for an e-mail message or sought other information deemed significant. Armed with that information, marketers can determine if their ads are worth the expense.

"We think it's critical to help advertisers keep track of what's going on," Salar Kamangar, Google's director for product marketing, said. "We didn't want them to either overbid or underbid," he said, referring to the process by which advertisers pay for Google ads. "If they overbid, we could possibly lose them as a customer. If they underbid, they're competing less effectively than the competition."

In the three weeks since Google announced the feature, Mr. Kamangar said, the site has received stronger than expected interest from advertisers. While declining to be specific about usage, Mr. Kamangar said clients using the new service had "generally increased their bids, rather than decreased them."

The feature also helps Google avoid temporary advertising suspensions by marketers, who often test the effectiveness of their ads by simply stopping their advertising campaigns for a few days and tracking the effects on sales.

Industry analysts say the Google feature, and similar services from companies like DoubleClick, LinkShare and CentrPort, are helping a generation of marketing executives to quantify the benefits of their advertising investments.

"This isn't something most traditional marketers are used to thinking about," said Charlene Li, an analyst with Forrester Research, a technology consulting firm. "Most of these ad executives got to where they are because they ran great branding campaigns," and not by showing statistical acumen, she said.

Indeed, before the Web, the only advertising medium that made such calculations was direct mail, which many marketing executives regard as being filled with junk mailers and number-crunching catalog mavens.

"But in the last couple years, C.E.O.'s in traditional companies have been looking at budgets for all these different areas of the business and calculating the return on investment for all that spending," Ms. Li said. "Now they're finally looking at marketing budgets, too, and saying, 'You're spending $1 million on this campaign, and what exactly is it going to do for sales?' "

But even though online tools are now available to measure return on advertising, traditional marketers know little about them.

A new Forrester survey of 95 marketers, released Friday, found that 81 percent said their online ad spending would increase if they saw research proving that such ads would increase sales. Yet most of the survey's respondents were unaware of the numerous studies "that show the impact of increased online spending - and those who were aware discounted the results as inapplicable," the report said. "Only firsthand, positive experiences with online media will give marketers the confidence to increase spending."

Google's service is one that could provide marketers such assurances, Ms. Li said. CNET Networks Inc., the online technology publisher of Web sites including News.com, Builder.com, GameSpot and others, is offering similar services. Earlier this year, GameSpot, an informational Web site for video game enthusiasts, rolled out a program for its advertisers called GameSpot Trax, a free online service that can track various statistical results of ad campaigns.

GameSpot Trax is unusual among online advertising analysis services, CNET's chief operating officer, Barry Briggs, said, because it charts elements other than sales, like online consumer trial rates and consumer awareness via Internet inquiries.

GameSpot Trax provides statistics tracking each category for the 8,500 video game products covered by GameSpot and CNET's other game sites. For instance, for the Electronic Arts football video game Madden '04, GameSpot Trax gauges how consumer awareness has changed since its release in early August by tracking, among other things, the number of players who have visited the Madden '04 section of the GameSpot Web site, in contrast to the number who have visited the GameSpot Web pages of competing game titles.

"One marketer looked at this data and went to his C.E.O. and said 'I got tremendous awareness and consideration and trial for this game, but you know what? They hated it,' " Mr. Briggs said. "So we're giving people insight into not only their marketing but how good their product is."

One CNET advertising client, Erik Johnson, president of Ignited Minds, an advertising firm in Marina Del Rey, Calif., said such tracking services have impressed him. "If I can see what's happening, it encourages me to do even more spending," he said.

Mr. Johnson said his clients, who include major consumer electronics and video game companies like Sony, Electronic Arts and Activision, have made "meaningful changes" in their online ad spending, partly in response to better tracking of results. "In the past, they might've done $20,000 in an online campaign," he said. "Now it might be $200,000 or $300,000."

Mr. Briggs said that since Trax appeared this spring, the number of ad campaigns on GameSpot and CNET's other video game Web sites had grown by threefold, and that average spending per campaign had increased 25 percent, with the biggest marketers increasing spending by 50 percent.

In coming months, GameSpot will integrate its buying cycle data with sales statistics from the research firm NPD to help predict game sales, Mr. Briggs said. He said that next year CNET would offer advertisers on its other Web sites a similar service and start charging Trax clients a fee. "The amount you can learn is so compelling, in so many cases, that it's like the holy grail." he said.

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