Metrics for the New Internet Marketing Communications Mix

The Internet provides marketers with an expanded set of communications vehicles for reaching customers. Two of the most important and fast-growing elements of this new communications mix are online advertising and electronic word-of-mouth. While these vehicles provide new opportunities, they are also challenging marketers to understand how consumers respond and to develop new metrics for assessing performance. The purpose of this chapter is to review recent research developments in marketing that are most relevant to assessing the impact of these communications vehicles. The chapter first discusses the two major forms of Internet advertising, display ads (also known as banners) and paid search. (Paid search refers to the text ads served as sponsored links by Internet search engines.) The existing literature on banner ads provides a body of empirical findings as well as a set of methods that marketers can draw upon to assess performance. Research on paid search is still emerging but early work has developed approaches that marketers can use as the basis for suitable performance metrics. As a social medium, the Internet offers users new ways to communicate more easily and more extensively with others. Online communities, social networking sites, online referral programs, product reviews, and blogs all allow word-of-mouth to spread faster and farther than in the past. Research has shown how electronic records of online word-of-mouth (e.g., product reviews) can be connected, via models, to performance outcome variables such as product ratings and sales levels. Emerging work shows promise at identifying the particular members of online communities who are most likely to influence the actions of others, revealing opportunities for firms to manage