ABSTRACT
According to conventional wisdom, Internet advertising differs from traditional
advertising in that it is customized, nondisruptive and allows for sales-based efficient
tracking via click-through rates (The Economist, 2001). However, click-through rates
(i.e., the number of clicks on a banner relative to the total number of displays), are
generally very low (seldom tops one percent), and consumers have even learned not to
look at the banner ads (Wall Street Journal, 2001). Therefore, it has been concluded that
banner ads on the Internet are of little value. For this and other reasons, the revenue from
banner ads has declined recently (Green and Elgin, 2001) creating problems for Internet
firms which rely heavily on advertising revenue (e.g., Yahoo, DoubleClick). The question
remains whether banner advertisements have positive effects on consumer behavior other
than click through. If so, click-through rates are used incorrectly as an absolute measure
of success.
