In an Instant

When you want to determine which of your banner ads are delivering the most cost-efficient results and which are simply draining your bank account, take a valuable lesson from the marketers who track customer responses in real time.

Using a process known as real-time optimization, you can uncover information, like how many customers have clicked on a banner ad, the ad's conversion rate (the total number of transactions from that ad divided by the total number of visits during any given period) and even customer response to individual aspects of an offer, such as the price or the message itself. That information helps entrepreneurs "optimize the ads that are running, push Web sites that aren't performing to do better and, if necessary, cancel contracts with them," says Brad Aronson, president of i-Frontier, an interactive advertising agency in Philadelphia. "One advantage of Net advertising is that you can measure results daily and use that information to increase efficiency."

Analyzing results every day-or even in real time-is paramount, because if you find shoppers aren't responding to your banner ads, you'll want to make changes as soon as possible. "Tracking response in real time allows entrepreneurs to adapt fast," confirms James Vogtle, director of e-commerce research at strategy consulting firm Boston Consulting Group Inc. "If you're spending money on an ad campaign [that's not] working, you want to know immediately so steps can be taken to adjust it."

This kind of data analysis doesn't come cheap, however, and costs climb even higher when extensive changes have to be made. For starters, you'll need to install special software or hire a Web-tracking service before you can examine your server logs. The costs will vary depending on your needs and traffic volume. For around $700, you can get a real-time analysis product called Log Analyzer from WebTrends. For prices starting at $10,000, you can get third-party software like AdKnowledge from Engage and Dart from DoubleClick.

Aronson recommends a combination of these services. "WebTrends lets marketers know what consumers do on their sites-if they leave after seeing one page or if they never go to the special offer page," he explains, "while AdKnowledge and Dart will track from banner ad to order."

Depending on the results, once you obtain this information, you may want to change your banner ads to make them more effective. You can make those adjustments on your own or turn to outside help. If you use an ad agency, costs will range from $1,500 to $3,000, depending on the project's complexity. However, good marketers know to test many slight variations of the original banner before tweaking the ads for maximum effectiveness-and designers rarely charge extra for that service.

Is it worth the effort to develop your banner ads until they get the effect you're looking for? Apparently so. Says Aronson, "Usually, the increased response a marketer receives from tweaking ads significantly outweighs the additional costs."