• by Masha Geller , June 25, 2001

Here's some good news for your client meeting tomorrow morning: new research from Jupiter reveals that the actual return on investment (ROI) from online advertising is at least 25-35% higher than most marketers believe.

According to an Executive Survey, most online marketers continue to favor direct response metrics like click-through rates (60%) and cost per conversion (75%), while only 15% are conducting formal online branding measurement on a regular basis. Hence, Jupiter thinks that marketers who begin measuring the value of online branding will find a significant increase in the ROI of their digital marketing initiatives.

"Jupiter case study data show that the actual number of customers driven to websites by online advertising is greatly underestimated by traditional click-rate metrics," said Jupiter analyst Rudy Grahn, adding that marketers "must begin quantifying online branding by measuring the user's actual experience, instead of gauging only their attitudes."

According to Jupiter gurus, marketers who are looking to correlate ad spend with an increase in traffic are taking the wrong approach. In fact, while online advertising is more effective than marketers believe, it is still secondary to other factors in driving traffic to websites. Online advertising only contributes to 17% of the traffic to a site, while seasonality and an increase in Internet adoption contribute to 46% and 37% of the growth, respectively.

Jupiter analysts suggest that marketers can measure branding value by correlating behavioral data (including individual user click streams, repeated surfing patterns and aggregate user behavior) with the flights of specific ads.

While there are not yet standards for determining this correlation, marketers have begun experimenting with calculating the relationship between aggregate spend and the corresponding volume of user behaviors such as store locator pages hits, information requests and hits on phone-ordering information pages.

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