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Online advertising spending in the United States exceeds $20 billion annually. However, click rates on display advertisements average only 0.1 percent. Are low click rates evidence that display advertisements have no impact on consumer behavior? Or, does display advertising work in a manner similar to traditional “branding” advertising, with multiple exposures being required to effect a change in consumer behavior? This article shows that the click is not an accurate indicator of the effectiveness of online display advertisements. Even when click rates are minimal, display advertisements can generate meaningful increases in site visitation, trademark search, and both online and offline sales.
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