Online Advertising Metrics

Online Versus Offline Metrics

Online advertising uses different approaches to developing marketing strategies and predicting results, than offline traditional advertising.

Metrics used by traditional media planners are available online; and calculating these metrics for a particular buy is actually quite simple.

However, where unlike other media, every impression on the Internet is logged and reach numbers are commonly reported, it is much more difficult to find the necessary online data to predict advertising reach and frequency levels.

Typical online advertising measurements include:

Standard Online Sales Metrics

Click-through rate (CTR)
Conversion rate
Unique visitors numbers
Web site traffic data

Advertising Payment Model Metrics

The marketer may use various online advertising payment models, including:

Pay per click (PPC - payment is based solely on qualifying click-throughs)
Pay per lead (PPL - payment is based on qualifying leads)
Pay per sale (PPS - payment is based on qualifying sales). Most advertisers employ a combination of several payment models ("hybrid model").

Accurate online advertising metrics are critical for developing an efficient and predictable marketing strategy. On the other hand, to achieve more correct results, the measurements should be complemented by website demographic estimates and historical user-level frequency data, which are available from online data analysis providers.

Calculating Gross Ratings Points

The calculation of Gross Ratings Points is based on the total impressions on a site divided by audience size.

The percentage of users reached can be based off of the Internet Universe or total number of households.

Calculating Target Ratings Points

Target Ratings Points can be calculated for a particular ad campaign by multiplying the forecasted GRPs by the demographic composition of the site.

Site Demographic Compositions

Site demographic compositions can be obtained from website demographic data providers, such as Media Metrix, Nielsen/NetRatings, comScore, and @Plan.

Audience Reach

Audience Reach measures the number of people who view the ad. In online advertising, the number of visits, unique visitors and page views for each website are easily summarized and reported. However, it is difficult to predict the accurate reach numbers, which are essential for developing efficient advertising or marketing campaign.

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