New Yahoo Service Seeks To Improve ROI Of Online AdsNew Yahoo Service Seeks To Improve ROI Of Online Ads

Yahoo Inc. and Marketing Management Analytics Inc. on Friday launched a service that helps advertisers determine the effectiveness of online ads on sales.

The move comes as marketers are under increasing pressure by companies to justify the high cost of advertising, both on and offline. The new service delivers returns on investment by assessing ads on Yahoo and measuring their effectiveness against ads on other media, whether it's on another web site or on television or print.

Besides the comparison of marketing campaigns, the service provides recommendations to marketers on how to maximize the effectiveness of their overall spending on advertising. The service would be available at an additional cost.

Greg Stuart, president and chief executive of the Interactive Advertising Bureau, said marketers are increasingly under pressure to show chief executives and financial officers that advertising dollars are having a positive affect on sales.

"Marketers are under assault right now," Stuart said.

As a result, assessment services, such as Yahoo's and MMA's, are being used more often by marketing departments trying to turnaround their reputation of spending money freely, without any proven return.

"Marketers have been incredibly loosey-goosey about this stuff," Stuart said. "It's always been about making the big deal, but where's the accountability?"

The availability of measurement tools for online advertising is also a reflection of the market's maturity, and its acceptance as a medium on par with traditional channels. Other Internet companies, such as Google Inc., America Online Inc. and Microsoft Corp.'s MSN, also provide analytical services, which are growing in popularity as online advertising spending grows.

According to the IAB, which is an industry trade group for online advertisers, revenues hit $3.1 billion in the third quarter of 2005, a nearly 34 percent increase over the same period a year ago. Based on current trends, revenues for the year are expected to exceed $12 billion, well above last's year's record of $9.6 billion.

MMA, based in Wilton, Conn., uses a technique called "marketing mix modeling" that leverages mathematical calculations in estimating the impact of advertising, pricing, merchandising, competitive activity, seasonality and other factors on sales. The new service would add data from Yahoo, based in Sunnyvale, Calif., to judge the effectiveness of its banner, video and search advertising. The latter pertains to the displaying of text ads related to search queries.