REPORT SHOWS LITTLE CORRELATION BETWEEN CLICK RATES ANDCONVERSION RATES; ONLINE MARKETERS NEED TO UNDERSTAND REAL DRIVERS OF BRAND AWARENESS

AdKnowledge has released its Q2 Online Advertising Report (OAR). This report is a compilation of Web advertising statistics and trend analyses gathered from the AdKnowledge System and analyzed by the new AdKnowledge eAnalytics division. Together, the AdKnowledge System and eAnalytics enable marketers and agencies to measure, optimize and execute Web marketing campaigns. Leading the report's findings are statistics demonstrating that click rates have little value as indicators for return on investment (ROI) optimization because their correlation to conversion rates is so low.

"There has been a lot of talk lately about declining click rates," said AdKnowledge Vice President Steve Findley. "This new data proves that Web advertisers who are just looking at click rates are missing the bigger picture. The Web is fast becoming a more sophisticated advertising medium. Because it's so measurable, data mining will be increasingly used by smart marketers to optimize current campaigns and point the way towards more efficient campaigns in the future. Our customers already are taking advantage of this capability in AdKnowledge's new eAnalytics and DataDNA services," he added.

The AdKnowledge Online Advertising Report findings include:

• Click Rates Alone Are of Little Value According to the AdKnowledge OAR, only 14.3% of the time is the ad with the highest click rate in a campaign also the ad with the highest conversion rate. (Conversion rate is considered to be the rate at which people are converted from a view of an ad on the Web to a desirable action on an advertiser's site, like a sale or registration.) Other data shows that when selecting the best Web sites for a campaign based on click rates and not conversion rates, there is a 50/50 chance of choosing incorrectly. "Leaving that much to chance is simply unacceptable in Web marketing today," said Findley.
• Web Advertising Expansion Continues According to the AdKnowledge OAR, the number of sites and networks seeking advertising has continued to grow. In the second quarter, the number of Web media properties grew by 296 sites. At the end of March, the Web included a total of 1,815 sites and networks that accepted advertising, by the end of June, that number had risen to 2,111 - an increase of 16.3%.
• Average CPMs Decline Further: The report shows online advertising rates continued to decline in Q2, at the rate of 2.1% for the quarter. In Ql, average CPM cost was $34.96, while the average CPM cost in Q2 was $34.23. While not a significant dip, it is a steeper decline rate than seen in Q1, (0.5%) but not as steep as seen in Q4 last year (3%).
• Rich Media Acceptance Continues Growth: The report shows that interest in rich media advertising continues. All rich media formats experienced double-digit growth this quarter, as the number of sites accepting rich media ads continues to increase.

About The OAR Report

AdKnowledge uses a powerful data warehouse to supply valuable information from its Online Advertising Report (OAR) to marketers and agencies to help them optimize their Web advertising campaigns. The OAR is a compilation of Web advertising statistics analyzed by AdKnowledge eAnalytics, which provides a new level of insight into online brand awareness and purchase behavior. The information is gathered from the AdKnowledge System, which includes four components that span planning, campaign buying and trafficking, ad serving and targeting, and reporting. As the only provider of a complete set of Web ad management services exclusively to marketers and agencies that is independent of the media, AdKnowledge is in a unique position to provide an unbiased snapshot of the online advertising market. The AdKnowledge System's database contains more than 2,100 Web sites which, according to Nielsen//NetRatings, reaches over 94.1% of the overall Web audience. The full OAR is available at http://www.adknowledge.com/oar_2ndqtr99.pdf.

About AdKnowledge

AdKnowledge is the only provider of complete Web marketing management services focused entirely on the needs of advertising buyers. AdKnowledge combines eAnalytics and data mining with outbound campaign management to provide sophisticated marketers and agencies with insights into what drives brand awareness and purchase behavior across all Web sites and networks. The AdKnowledge System, an easy-to-use, Web-based tool, enables clients to act on those insights to execute, measure and optimize Web marketing campaigns. By not selling media, the company remains independent and can provide marketers with unbiased intelligence. AdKnowledge is a privately held company, funded by Kleiner Perkins Caufield & Byers, Mayfield Fund, The Walden Group, Partech International, Sandler Capital Management, Techno-Venture Co., Ltd. and GeoCapital Corporation. The Company's headquarters are in Palo Alto, Calif., with offices in New York. Contact via phone at 650-842-6500 or on the Internet at http://www.adknowledge.com.