Tech Industry

Banner Ads Click With Consumers: Online Advertising For Customer Retention

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Executive Summary

Banner advertising helps companies retain customers by bringing them back to a company's Web site faster and encouraging them to spend more. Total spending on Internet advertising now exceeds spending on some traditional media, but despite the quick adoption of online marketing by many firms, remarkably little is known about the potential payoffs of such efforts. Most online advertising exists in the form of banner ads, which combine graphics, text, and a link to an advertiser's Web site. Consumers access the advertiser's site by clicking on the banner ad, which is referred to as "Clickthrough." In the early days of e-commerce, the fact that consumer behavior in response to advertising could be measured instantaneously and objectively by calculating the clickthrough rate was seen as an exciting development.

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