Developing Online Goals and Benchmarks

Like any investment opportunity, in the interactive contest you should have a game plan for how to reach your objectives, all the while keeping an eye on your competition.

Potential Goals:

• drive traffic to your website
• capture new target customers
• build brand recognition
• generate leads
• increase sales of products and services
• reduce cost of client acquisition

Methods to Measure Results:

One common misconception about web advertising is that click-through rates (CTR) are a measure of how well a campaign performed over a period of time. But a company cannot gauge a campaign's true success by simply observing CTR. For example, many users visit websites for information gathering. If your goal is leads or conversions, CTR is an inaccurate metric, especially if 75% of the visitors, see a flash intro and click back. Perhaps the campaign's message could be targeted to keep more customers.

Consider these metrics:

CTR - Click-through rate. The ratio of the number of unique clicks delivered to the number of impressions served. If one out of 100 people who visit a specific website click on the advertiser's listing or banner, then the CTR of that advertisement is 1/100, or 1%

CPC - Cost per Click. Advertiser pays for every unique click that delivers a consumer to the website. Regardless of what that consumer does on the advertiser's site, the click is still paid. Example: Specific keyword campaign on Overture bids for $.25 CPC

CPM- Cost per Thousand. The advertiser pays a rate based on units of 1,000 banner impressions. Example: AOL banner campaign costs $70 CPM impressions

CPA - Cost per Acquisition. CPA is registered when a particular action is taken by the consumer on the advertiser's site, i.e. sales. The payable action is determined by the advertiser and an acquisition ratio can be extracted as well. Example: Google Adwords campaign for Wallets saw a CPA of $22 last week

CPL - Cost per Lead. One lead is a valid unique e-mail address from a consumer who "opts in" to receive an offer from the advertiser. The pay-out rate is determined by the opt-in and demographic collection requirements of the offer. Example: Campaign for e-newsletter subscription sign-up sees $10 CPA.

Page Views - The depth to which a customer views your site content having clicked through an advertisement measured in number of web pages. Log files on your site can track this data and some ad servers can also track customer progress. Example: Brand recognition was enhanced after 2 page views.

Time Spent per Visit - The duration of time a customer spends on your site having clicked through an advertisement, measured in minutes. Log files on your site can track this data and some ad servers can also track customer viewing time. Example: Brand impact was high after 6 minutes spent on the website.

Branding Impact Focus Groups and Surveys. More subjective, qualitative measures of an online campaign's success, branding surveys and focus groups can provide the advertiser with feedback as to the impact of the branding campaign. Brand recognition questions, perception maps and image correlation can indicate whether consumers perceive the company in the light/message the advertiser intends.

E-commerce/Shopping Cart Abandonment rates: According to CIO magazine, the second quarter of 2004 online conversion rates grew 14 percent over 2003. Order sizes also increased 15 percent over the past year, with an average transaction valued at $134.01. However, shopping cart abandonment rose 24 percent over the same period. Says the article, "roughly half of Web shopping carts never make it through to checkout."