March 28, 2002, 12:00 AM

A better yardstick for measuring online ads’ effectiveness

A new tool from Jupiter Media Metrix calculates the likely effectiveness of ads within demographics groups—much as TV and radio ad measuring devices do.

Fuzzy metrics have helped deflate enthusiasm for impression-based online advertising. But now Jupiter Media Metrix Inc. has launched a performance measurement tool that could pump online advertising back up. The research firm’s Internet advertising planning tool, based on Jupiter’s own consumer panel of 60,000 U.S. web users, applies the reach and frequency metric of offline media buying to the online environment.

The system will estimate the number of unique individuals that an ad buy of any size on any site or online channel will reach, based on the number of impressions purchased. The system calculates the likely effectiveness of the ads within different demographics. And the analysis allows online ad buyers to adjust campaigns and allocate spending efficiently as well as quantify the benefits of spending overall, says Jupiter.

“Traditional advertisers have learned how to make effective use of TV, radio, print and outdoor media with well-accepted metrics. The real issue is how to take advantage of the online medium in the same way,” says Charles Buchwalter, vice president of media research at Jupiter Media Metrix.

The new system may work well for brand advertisers scratching their heads over where online advertising fits into the marketing mix. It may have less impact on retailers more interested in direct marketing. Many already think they’ve found a pretty good yardstick to measure the effectiveness of marketing dollars spend online in pay-for-performance models such as keyword purchase.

In fact, Jupiter predicts that direct marketing initiatives-such as p4p deals and e-mail-will outstrip banner ads. But that doesn’t make the new service any less compelling as brand manufacturers continue to engage in image advertising. “If people can understand how an online campaign can work with an offline campaign, and that it’s a powerful way to underscore brand impact, they’ll use it more,” says Buchwalter.

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