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Getting the most bang for the buck

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As electronic commerce expands, more software companies are developing products that analyze the return on investment from Internet advertising. With the new software, business-to-business marketers can see which ads lead to sales and can target their campaigns to produce a higher ROI faster than ever before.

In the past, marketers could keep track of the number of people who clicked on their ads, but there was no way to determine how many of those clicks produced sales. The new tracking software takes care of that, says Rob Erlichman, president-CEO of Straight Up! Software Inc., San Diego.

Straight Up! recently introduced Straight Up! software, an Internet tracking and reporting product designed to help marketers measure and increase the effectiveness of their online advertising.

"Straight Up! [software] gives marketers the ability to understand what they're spending to acquire customers," Mr. Erlichman says.

The software, which starts at $2,500 a month and varies depending on the click-through rate, reports clicks, sales, repeat purchases and revenue. Using this data, advertisers can figure out the cost of acquiring a new customer and the money earned for each sale generated by online ads.

"We can track anything," Mr. Erlichman says. The software can analyze Internet visitor activity in or near "real time," then report to a marketer at whatever intervals the person requests.

Measuring ad effectiveness

Brandon Wilson uses Straight Up! to determine the effectiveness of his Web advertising, primarily in banners. With the software, this director of Internet marketing can determine which banner produces the most sales for his company, @Backup, a San Diego developer of online backup for software. Before using the software, he could tell only the number of times his product was downloaded.

"This tool gives us great sales analysis•not only which banner, but which media sites work best," Mr. Wilson says.

Once he determines which banners and sites sell the most products, he spends more money on the advertising that works. "It would be really blind advertising without" Straight Up!, he says.

Mr. Wilson says ROI, calculated with the cost to acquire a customer, varies for each campaign. So far, he has seen from a 20% revenue loss to a 250% gain from campaign to campaign.

One of the software features he likes best is the "media eye" report. It tracks the best and worst ROI figures daily. So, for example, if he has two banners on one site and the report indicates one of the banners is outperforming the other, he can remove the ineffective banner right away.

Tracking complex sites

Another company that creates Web advertising tracking software is Accrue Software (www.accrue.com), Sunnyvale, Calif.

Most customers that use the company's software, Accrue Insight, have high-volume, complex sites, says Vito Salvaggio, Accrue's product marketing director. The software, introduced in 1996, is licensed to corporations starting at $17,000. The price varies depending on the number of servers.

About a year ago, Kevin Strange started using Accrue to keep track of the ROI for his company's banner ads.

"We won't purchase anything [ads] without them running through Accrue," says Mr. Strange, VP of Net-Temps, a Web-based company in Tyngsboro, Mass.

Net-Temps, which helps staffing companies and third-party recruiters find and place temporary employees, primarily in high-tech industries, places ads with 15 search engines, including AltaVista and Lycos. Typically, his company buys an ad on a 30-day trial basis. During that time, data tracked by Accrue reveal whether the ad generates a favorable click-through rate. If it does, the company will sign a long-term contract with that search engine.

Net-Temps estimated that devising an in-house system to track banner ads would cost between $250,000 and $500,000.

Mr. Strange says he likes to see a 3% to 5% click-through rate on his banner ads. With Accrue, he says, he can see if his ads are generating those numbers. Before using Accrue, he had to rely on statistics from the search engine, which took three days to a week to obtain.

"We've probably added at least a percentage point to our click-through rate because of Accrue, because we can see real time what's happening," Mr. Strange says. And that increase, he says, is significant.

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